CMS: Health spending to grow average 5.8% annually through 2024

National health spending is expected to grow an average 5.8% annually from 2014-2024, due to coverage expansions under the Affordable Care Act, anticipated economic growth and an aging population, the Centers for Medicare & Medicaid Services reported today in Health Affairs. “However, these projected growth rates are significantly lower than those observed over the three decades prior to the recent recession,” said Sean Keehan, a senior economist in CMS’s Office of the Actuary. Health spending is projected to grow 1.1% faster than gross domestic product per year during this period, raising the health care share of GDP from 17.4% in 2013 to 19.6% by 2024. CMS projects health care spending to have grown 5.5% in 2014, primarily due to insurance coverage expansions and a sharp rise in prescription drug spending, which is projected to have accelerated from 2.5% in 2013 to 12.6% in 2014. Spending for hospital care is expected to have grown 4.4% in 2014, similar to 2013. The report also notes that hospital price growth, as measured by the Producer Price Index, decelerated from 2.2% in 2013 to 1.4% in 2014 – the slowest rate since 1998.