Health care spending in the U.S. could soon top $5 trillion, according to new government projections.
The nation is in the midst of a historic slowdown in health care spending, which has lasted longer than most experts anticipated. But it won't last forever, actuaries within the Health and Human Services Department said Wednesday.
HHS is expecting health care costs to grow more quickly over the coming decade—although not quite as quickly as they have in the past.
The current slowdown in health care spending is a big deal, for families as well as the federal budget. And 2013 was the fifth-consecutive year of historically low growth in health spending, according to HHS' annual National Health Expenditures report.
Health care expenses, including government programs as well as private insurance, were roughly $3 trillion in 2013, according to the latest report—which is considerably lower than a lot of experts would have predicted a few years earlier. Spending only grew last year by 3.6 percent, which is about the same as the overall growth in the economy.
Health care tends to fluctuate with the economy, and HHS' actuaries predicted that national health care spending will grow more quickly as the economy improves over the next few years.
Wednesday's report predicts that health expenditures will increase by 5.6 percent this year, slow down again in 2015, then rise at about 6 percent per year for the next decade. That would put total national health spending at about $5.2 trillion in 2023, HHS officials said.
If those projections are accurate, health care costs will once again start to grow more quickly than the overall economy—meaning health care won't just cost more, but will eat up a bigger share of all spending. Health care makes up about 17 percent of the economy right now; HHS expects that share to rise to 19 percent over the next decade.
The actuaries said they're expecting costs to rise more quickly because they're expecting the economy to improve. People often put off non-emergency health care during economic downturns. The aging population will also be a factor as more baby boomers enroll in Medicare, the actuaries said.
But a few factors are keeping cost growth in check. High-deductible insurance plans are becoming more popular, and those plans often discourage people from using a lot of health care services. Payment cuts in the Affordable Care Act will also keep Medicare's cost growth contained, the actuaries said, although they wouldn't say whether costs would grow faster or slower without Obamacare.