National healthcare expenditure projected to reach $5.7T by 2026 — 7 insights

Health expenditure is projected to capture an increasing share of the U.S. economy, climbing to 19.7 percent of GDP by 2026, according to a report by the CMS Office of the Actuary. Here are seven insights:

1. National health spending is expected to grow 5.5 percent annually from 2017 to 2026, compared to 4.2 percent from 2008 to 2016. The report projects healthcare spending reached $3.5 trillion in 2017.

2. From 2017 to 2026, health spending is projected to rise 1.8 percent, growing 1.0 percentage point faster than GDP.

3. Three factors contributing to national health spending and enrollment growth are changes in anticipated income growth, higher costs for medical goods and services and enrollment shifting from private health insurance to Medicare.

4. During the projection period, Medicare spending is expected to grow 7.4 percent and Medicaid spending is expected to grow 5.8 percent. Meanwhile, the insured share of the population is expected to decrease from 91.1 percent in 2016 to 89.3 percent in 2026.

5. In 2018, national health spending is projected to increase by 5.3 percent. The CMS Office of the Actuary predicts the growth of healthcare goods and services costs will rise to 2.2 percent this year.

6. The report expects Medicaid spending growth to reach 6.9 percent in 2018, up from 2.9 percent last year, driven by accelerating growth in Medicaid's net cost of health insurance.

7. Federal, state and local governments financed 45 percent of total national health expenditures in 2016. The CMS Office of the Actuary expects this to rise to 47 percent by 2026 while costs sponsored by private businesses, households and other private revenues drop 2 percent — to 53 percent of total spending — by that time.

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