National Health Expenditure Projections, 2016-25: Price Increases, Aging Push Sector To 20 Percent Of Economy.

Under current law, national health expenditures are projected to grow at an average annual rate of 5.6 percent for 2016-25 and represent 19.9 percent of gross domestic product by 2025. For 2016, national health expenditure growth is anticipated to have slowed 1.1 percentage points to 4.8 percent, as a result of slower Medicaid and prescription drug spending growth. For the rest of the projection period, faster projected growth in medical prices is partly offset by slower projected growth in the use and intensity of medical goods and services, relative to that observed in 2014-16 associated with the Affordable Care Act coverage expansions. The insured share of the population is projected to increase from 90.9 percent in 2015 to 91.5 percent by 2025.

National Health Expenditure Projections, 2015-25: Economy, Prices, And Aging Expected To Shape Spending And Enrollment.

Health spending growth in the United States for 2015-25 is projected to average 5.8 percent-1.3 percentage points faster than growth in the gross domestic product-and to represent 20.1 percent of the total economy by 2025. As the initial impacts associated with the Affordable Care Act's coverage expansions fade, growth in health spending is expected to be influenced by changes in economic growth, faster growth in medical prices, and population aging. Projected national health spending growth, though faster than observed in the recent history, is slower than in the two decades before the recent Great Recession, in part because of trends such as increasing cost sharing in private health insurance plans and various Medicare payment update provisions. In addition, the share of total health expenditures paid for by federal, state, and local governments is projected to increase to 47 percent by 2025.

National health expenditure projections, 2014-24: spending growth faster than recent trends.

Health spending growth in the United States is projected to average 5.8 percent for 2014-24, reflecting the Affordable Care Act's coverage expansions, faster economic growth, and population aging. Recent historically low growth rates in the use of medical goods and services, as well as medical prices, are expected to gradually increase. However, in part because of the impact of continued cost-sharing increases that are anticipated among health plans, the acceleration of these growth rates is expected to be modest. The health share of US gross domestic product is projected to rise from 17.4 percent in 2013 to 19.6 percent in 2024.

National health expenditure projections, 2013-23: faster growth expected with expanded coverage and improving economy.

In 2013 health spending growth is expected to have remained slow, at 3.6 percent, as a result of the sluggish economic recovery, the effects of sequestration, and continued increases in private health insurance cost-sharing requirements. The combined effects of the Affordable Care Act's coverage expansions, faster economic growth, and population aging are expected to fuel health spending growth this year and thereafter (5.6 percent in 2014 and 6.0 percent per year for 2015-23). However, the average rate of increase through 2023 is projected to be slower than the 7.2 percent average growth experienced during 1990-2008. Because health spending is projected to grow 1.1 percentage points faster than the average economic growth during 2013-23, the health share of the gross domestic product is expected to rise from 17.2 percent in 2012 to 19.3 percent in 2023.

National health expenditure projections, 2012-22: slow growth until coverage expands and economy improves.

Health spending growth through 2013 is expected to remain slow because of the sluggish economic recovery, continued increases in cost-sharing requirements for the privately insured, and slow growth for public programs. These factors lead to projected growth rates of near 4 percent through 2013. However, improving economic conditions, combined with the coverage expansions in the Affordable Care Act and the aging of the population, drive faster projected growth in health spending in 2014 and beyond. Expected growth for 2014 is 6.1 percent, with an average projected growth of 6.2 percent per year thereafter. Over the 2012-22 period, national health spending is projected to grow at an average annual rate of 5.8 percent. By 2022 health spending financed by federal, state, and local governments is projected to account for 49 percent of national health spending and to reach a total of $2.4 trillion.

National health expenditure projections: modest annual growth until coverage expands and economic growth accelerates.

For 2011-13, US health spending is projected to grow at 4.0 percent, on average--slightly above the historically low growth rate of 3.8 percent in 2009. Preliminary data suggest that growth in consumers' use of health services remained slow in 2011, and this pattern is expected to continue this year and next. In 2014, health spending growth is expected to accelerate to 7.4 percent as the major coverage expansions from the Affordable Care Act begin. For 2011 through 2021, national health spending is projected to grow at an average rate of 5.7 percent annually, which would be 0.9 percentage point faster than the expected annual increase in the gross domestic product during this period. By 2021, federal, state, and local government health care spending is projected to be nearly 50 percent of national health expenditures, up from 46 percent in 2011, with federal spending accounting for about two-thirds of the total government share. Rising government spending on health care is expected to be driven by faster growth in Medicare enrollment, expanded Medicaid coverage, and the introduction of premium and cost-sharing subsidies for health insurance exchange plans.

National health spending projections through 2020: economic recovery and reform drive faster spending growth.

In 2010, US health spending is estimated to have grown at a historic low of 3.9 percent, due in part to the effects of the recently ended recession. In 2014, national health spending growth is expected to reach 8.3 percent when major coverage expansions from the Affordable Care Act of 2010 begin. The expanded Medicaid and private insurance coverage are expected to increase demand for health care significantly, particularly for prescription drugs and physician and clinical services. Robust growth in Medicare enrollment, expanded Medicaid coverage, and premium and cost-sharing subsidies for exchange plans are projected to increase the federal government share of health spending from 27 percent in 2009 to 31 percent by 2020. This article provides perspective on how the nation's health care dollar will be spent over the coming decade as the health sector moves quickly toward its new paradigm of expanded insurance coverage.