National Health Expenditure Projections, 2018-27: Economic And Demographic Trends Drive Spending And Enrollment Growth

Health Affairs
Andrea SiskoJames C Hardesty

Abstract

National health expenditures are projected to grow at an average annual rate of 5.5 percent for 2018-27 and represent 19.4 percent of gross domestic product in 2027. Following a ten-year period largely influenced by the Great Recession and major health reform, national health spending growth during 2018-27 is expected to be driven primarily by long-observed demographic and economic factors fundamental to the health sector. Prices for health care goods and services are projected to grow 2.5 percent per year, on average, for 2018-27-faster than the average price growth experienced over the last decade-and to account for nearly half of projected personal health care spending growth. Among the major payers, average annual spending growth in Medicare (7.4 percent) is expected to exceed that in Medicaid (5.5 percent) and private health insurance (4.8 percent) over the projection period, mostly as a result of comparatively higher projected enrollment growth. The insured share of the population is expected to remain stable at around 90 percent throughout the period, as net gains in health coverage from all sources are projected to keep pace with population growth.

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