Health Beat: Healthcare spending jumps 5.8% to $3.2 trillion in 2015

by Talk Business & Politics staff ([email protected]) 136 views 

Editor’s note: Each Wednesday, Talk Business & Politics provides “Health Beat,” a round-up health-related topics. –––––––––––––––

Per capita health care spending grew by 5%, or about $9,990 per person, and overall health spending grew by 5.8% in 2015 to $3.2 trillion. That growth rate is faster than the overall economy as measured by Gross Domestic Product, according to a study by the Office of the Actuary at the Centers for Medicare & Medicaid Services (CMS) published on December 2.

Although those annual rates continue to be below the rates of most years prior to passage of the Affordable Care Act, the report concludes that 2015 expenditure growth was primarily the result of increased use and intensity of services as millions gained health coverage, as well as continued significant growth in spending for retail prescription drugs. Spending on prescription drugs increased 9% in 2015, lower than the 12.4% in 2014, yet significantly higher compared to 2.3% growth in 2013. On a per-enrollee basis, overall spending increased by 4.5% for private health insurance, 1.7% for Medicare, and 3.8% for Medicaid.

The report noted that over a two-year period, 20 million individuals either gained private health insurance coverage or enrolled in the Medicaid program, primarily as the result of the Affordable Care Act. The share of the population with health coverage increased from 86% in 2013 to 90.9% in 2015. Health care spending grew 2.1 percentage points faster than the overall economy in 2015, resulting in a 0.4 percentage-point increase in the health spending share of gross domestic product (GDP) – from 17.4% in 2014 to 17.8% in 2015. In the decade prior to the passage of the Affordable Care Act (2000-2009), health care spending increased 2.8 percentage points faster than GDP, on an annual average basis.

To view the CMS report, click here.

People who consistently smoked an average of less than one cigarette per day over their lifetime had a 64% higher risk of earlier death than never smokers, and those who smoked between one and 10 cigarettes a day had an 87% higher risk of earlier death than never smokers, according to a new study from researchers at the National Cancer Institute (NCI).

Risks were lower among former low-intensity smokers compared to those who were still smokers, and risk fell with earlier age at quitting. The results of the study were reported on Monday (Dec. 5) in JAMA Internal Medicine. NCI is part of the National Institutes of Health.

When researchers looked at specific causes of death among study participants, a particularly strong association was observed for lung cancer mortality. Those who consistently averaged less than one cigarette per day over their lifetime had nine times the risk of dying from lung cancer than never smokers. Among people who smoked between one and 10 cigarettes per day, the risk of dying from lung cancer was nearly 12 times higher than that of never smokers. Smoking has many harmful effects on health, which have been detailed in numerous studies since the U.S. Surgeon General’s 1964 report linking smoking to lung cancer. The health effects of consistent low-intensity smoking, however, have not been well studied and many smokers believe that low-intensity smoking does not affect their health.

New research from Accenture estimates that total employer penalties related to the health insurance mandates from the Affordable Care Act (ACA) are expected to reach $31 billion for 2016, nearly 50% above original estimates. Under the ACA’s “employer mandate,” employers that fail to offer health coverage to their employees are subject to financial penalties.

The Congressional Budget Office (CBO) has projected that non-compliant employers – i.e., those not offering coverage – could face $21 billion in penalties for the 2016 tax-reporting period. However, an Accenture analysis has identified a new segment of employers, deemed “unintentionally non-compliant,” whose penalty exposure could amount to an additional $10 billion during the 2016 tax period. This group represents employers that offer compliant health coverage yet fail to meet IRS reporting requirements needed to demonstrate compliance under the law.

In total, employer penalty exposure could reach $31 billion for 2016, compared with an estimated $11 billion for 2015.