CMS Office of the Actuary releases 2018-27 projections of national health expenditures

U.S. health spending is expected to grow at an average annual rate of 5.5% in the next decade, CMS's Office of the Actuary reported Wednesday. National health expenditures are expected to reach nearly $6 trillion by 2027, the report said.

U.S. health spending is expected to grow at an average annual rate of 5.5% in the next decade, CMS's Office of the Actuary reported Wednesday. National health expenditures are expected to reach nearly $6 trillion by 2027, the report said. According to CMS, the increase in national health spending is expected to be faster than projected growth in Gross Domestic Product (GDP) by 0.8 percentage points between 2018 and 2027. The report forecasts the health share of GDP to increases from 17.9% in 2017 to 19.4% by 2027. The outlook for national health spending and enrollment in the coming decade is expected to be driven by increases in medical goods and services, key economic factors such as growth in income and employment, and demographic factors such as the Baby Boom Generation continuing to age from private insurance into Medicare. Annual spending growth for Medicare is projected to average 7.4% from 2018-2027, while Medicaid's average annual growth is expected to be 5.5% during that time. The report said that spending growth for prescription drugs is expected to generally accelerate in the coming decade, averaging 5.6%, largely the result of faster utilization growth. Underlying factors in the faster growth include efforts by employers and insurers to promote increased medication adherence for those with chronic conditions, changing pharmacotherapy guidelines, and the entrance of new and expensive drugs to the market.