Health spending reached $3 trillion last year, as millions of people gained insurance coverage under the Affordable Care Act and prescription drug prices rose.
After years of sluggish growth in the aftermath of the recession, annual health spending in the U.S. jumped 5.3 percent to $9,523 per person, according to an analysis by the Centers for Medicare and Medicaid Services published in the journal Health Affairs on Wednesday.
Expansion of insurance coverage was a main driver: In 2014, 2.2 million people gained private health insurance and 7.7 million joined Medicaid, most of whom were newly eligible for the coverage due to coverage expansion under health reform. Not all of these people previously lacked insurance; 8.7 million people gained insurance overall, according to the report.
Another major driver of the increases was prescription drug spending, which grew more than 12 percent to $297.7 billion — its largest annual increase in more than a decade. Anne Martin, an economist in the office of the actuary at CMS attributed the growth in part to a new generation of pricey hepatitis C drugs. Price hikes on brand name drugs also contributed, along with fewer savings on drugs whose patents expired.
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Jeffrey R. Ungvary President