Javascript is not enabled.

Javascript must be enabled to use this site. Please enable Javascript in your browser and try again.

Skip to content
Content starts here
CLOSE ×
Search
Leaving AARP.org Website

You are now leaving AARP.org and going to a website that is not operated by AARP. A different privacy policy and terms of service will apply.

Health Care Spending Growth Slows Down

Rate in 2016 still well above overall inflation

Health Care Spending Growth Slows Down
The slowdown comes two years after a flood of newly insured patients entered the health care market.
Getty Images

Health care spending growth slowed down significantly in 2016, federal officials said this week, although it again rose more than the overall inflation rate.

The rate of health care spending grew by 4.3 percent last year, to $3.3 trillion, according to the Centers for Medicare & Medicaid Services. Although that is well below the growth rate of 5.8 percent in 2015 and 5.1 percent in 2014.

member card

AARP Membership — $12 for your first year when you sign up for Automatic Renewal

Get instant access to members-only products and hundreds of discounts, a free second membership, and a subscription to AARP the Magazine.

Join Now

Still, that came in a year when the consumer price index went up 2.2 percent, according to the U.S. Bureau of Labor Statistics. And the CMS projects that spending will rise at an average rate of 5.6 percent for the next decade.

Health care spending also is growing faster than the U.S. gross domestic product, which means it continues to inch up as a percentage of the overall economy. The CMS said health care spending made up 17.9 percent of the economy in 2016, up from 17.7 percent the previous year.

The slowdown comes two years after a flood of newly insured patients entered the market because of the Affordable Care Act, bringing with them the need to get treatments that had been deferred while they were uninsured.

There has also been significant increases in prescription drug spending in recent years. An AARP Public Policy Institute study released Wednesday reported that prescription drug prices went up 50 times faster than the rate of inflation in 2015. “Given these trends in prescription drug price increases, we’re going to continue seeing more and more older Americans, especially those on fixed incomes, who’ll be unable to afford their prescription drugs,” said Leigh Purvis, the director of health services research at the institute and coauthor of the report.

membership-card-w-shadow-192x134

AARP Membership — $12 for your first year when you sign up for Automatic Renewal

Get instant access to members-only products and hundreds of discounts, a free second membership, and a subscription to AARP the Magazine.