WASHINGTON — After braking for a recession and higher payment demands on consumers, the cost of health care is once more grabbing a larger share of the American wallet.

WASHINGTON — After braking for a recession and higher payment demands on consumers, the cost of health care is once more grabbing a larger share of the American wallet.

Federal health economists Monday said that the nation probably spent $3.1 trillion on health care last year and that spending growth will average 5.8 percent a year over the next decade. Spending rose only about 4 percent a year between 2008 and 2013.

Health care currently accounts for about 1 in 6 dollars spent in the United States — double the share of nearly every other developed country. By 2024, health care will account for 1 in every 5 dollars of U.S. spending.

Economists with the federal Centers for Medicare & Medicaid Services said spending increased an estimated 5.5 percent last year, largely because 8.4 million people gained health insurance through the Medicaid expansions and tax subsidies provided under the Affordable Care Act. A surge in prescription drug spending for specialty medicines treating hepatitis C, cancer and multiple sclerosis also drove up spending, they said.

Longer term, baby boomers entering their Medicare years are expected to raise spending significantly for that federal program.

The spending projections were published Tuesday in the August edition of Health Affairs magazine.

Sean Keehan, a federal health economist and lead author of the article, said changes in cost-sharing between workers and employers as well as more price transparency would continue to slow price and spending increases.

"Although spending is going up faster than in the recent past, it should be slower than the growth experienced in the three decades prior to the recession," Keehan said, when spending increased about 9 percent a year.

Keehan said one reason for the slower growth is the rapid spread of high-deductible health plans in employer-provided health insurance. One in five workers now has a high-deductible plan.

Tuesday’s numbers are all projections. Actual spending for 2014 won’t be known until December.

Still, the projections set the stage for another political fight over the cost of care. Under the Affordable Care Act, federal spending for Medicare and Medicaid that is more than a percentage point greater than economic growth triggers a cost-cutting review by a group of experts known as the Independent Payments Advisory Board.

The 5.8 percent projected spending increase over the next decade is 1.1 percentage points greater than anticipated economic growth. The health economists said that trigger for the payments board to act would likely be reached in 2017.

The Affordable Care Act bars the board from raising taxes or cutting benefits, so it would probably lower reimbursements to hospitals, drug companies, medical device manufacturers and physicians. Only a supermajority in Congress could stop the board’s recommendations from taking effect.

The health care industry, supported by Sen. John Cornyn of Texas and many other Republicans, has fought against the board’s powers for more than five years.

Resistance remains so high that President Barack Obama has not sent any nominations to the Senate for the 15 seats on the board.

The rise in spending is largely due to a rise in the use of medical care. Drug prices went up 4.1 percent, while drug spending rose three times as fast. Prices for hospital care went up 1.4 percent last year, the lowest amount since 1998. Doctors raised prices 0.5 percent last year, after no increase in 2013. Medical inflation is not expected to exceed 2 percent until 2016.

By contrast, the expansion of Medicaid to millions of new patients in many states drove up spending last year by an estimated 12 percent, and it’s expected to grow another 8 percent this year. Medicaid, the federal-state health insurance for low-income Americans, now covers more than 66 million people. (Texas political leaders chose not to expand the program under the Affordable Care Act.)

Private health insurance spending rose an estimated 6.1 percent last year.

By 2024, the federal health economists forecast U.S. health care spending will total $5.425 trillion — 19.6 percent of gross national product.

Follow Jim Landers on Twitter at @landersjim.


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