As a result, the number of Medicare enrollees is expected to increase from 60 million in 2018 to 75 million by 2028. Since people age 65 and over, on average, spend more on healthcare than any other age group, growth in the number of older Americans is expected to increase total healthcare costs over time.įurthermore, as individuals turn 65, they will become eligible for Medicare. Census Bureau projects that this figure will exceed 20 percent by 2030. In 2018, individuals age 65 and over accounted for 16 percent of the U.S.

The most notable of those factors are an aging population and rising healthcare prices. There are several underlying factors that can increase price and utilization, thereby boosting spending on healthcare. Generally, healthcare spending can be thought of as a function of price (dollars charged for healthcare services) and utilization (the amount of services used). TWEET THIS Why Is Healthcare Spending Increasing in the United States? However, those projections do not take into account the impacts of the COVID-19 pandemic while the extent of the effect is still uncertain, testing and treatment costs are expected to be high and can potentially drive the cost of healthcare up. The Centers for Medicare and Medicaid Services (CMS) project that by 2028, such costs will climb to $6.2 trillion, or about $18,000 per person, and will represent about 20 percent of GDP. Relative to the size of the economy, healthcare costs have increased over the past few decades, from 5 percent of gross domestic product (GDP) in 1960 to 18 percent in 2018. In 2018, the United States spent about $3.6 trillion on healthcare, which averages to about $11,000 per person. The United States has one of the highest costs of healthcare in the world.

How Much Does the United States Spend on Healthcare? Below is a look at the increasing healthcare costs in the United States and what is causing that rapid growth. High costs of healthcare can also hinder the efforts to thwart public health crises like the COVID-19 outbreak as people are unable to pay for tests or treatments. That trend will exacerbate the nation’s growing debt and is particularly problematic because it does not result in better health outcomes. The United States spends significantly more on healthcare compared to other nations and such spending is expected to continue growing.

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