CMS: National health spending up 4.6% in 2018, hospital spending slows

U.S. spending on health care grew 4.6% in 2018, slower than the 5.4% overall growth in the economy but up from 4.2% in 2017, largely due to reinstatement of the Affordable Care Act’s health insurance tax after a one-year moratorium included in the Consolidated Appropriations Act of 2016, the Centers for Medicare & Medicaid Services reported today. Medicare, Medicaid and private coverage all experienced faster spending growth. The net cost of health insurance (comprised of non-medical insurance expenses like administration, taxes and underwriting gains and losses) increased 13.2%, up from 4.3% in 2017, driven largely by the health insurance tax reinstatement. Spending for hospital care grew 4.5%, down from 4.7% in 2017 due to slower growth in the use and intensity of hospital services. Spending for physician and clinical services grew 4.1%, down from 4.7% in 2017, while spending for retail prescription drugs grew 2.5%, despite increases in the use of generics. Retail drug spending does not include the cost of drugs administered in hospitals. The share of the economy devoted to health care spending fell to 17.7% from 17.9% in 2017.