Health care remains a hot button topic in the United States, thanks in large part to uncertainty in regards to the health insurance system.
Regardless of the type of health insurance you carry, here’s something you need to know: health care spending reached a new peak in 2016.
According to a report from the Department of Health and Human Services, national health expenditures were set to reach approximately $3.35 trillion in 2016. This works out to an average annual cost of $10,345 per person.
What’s the Cause of this Growth?
Not only did U.S. health care spending reach new heights last year, but growth is projected to average 5.8 percent through 2025, the report found.
There are many reasons for this, including but not limited to:
- Accelerated growth in medical prices
- Aging population
- Strong economy
Where Does the Money Go?
With $3.35 trillion spent on national health expenditures, you may be wondering where all this money is going. Here is an approximate breakdown, according to Health and Human Services:
- Hospital care: 32 percent
- Doctors: 20 percent
- Prescription drugs purchased through pharmacies: 10 percent
While $10,345 is the average per person expense, it’s important to note that spending varies widely from one individual to the next.
For example, five percent of the population – made up of those who are the most ill – account for approximately 50 percent of spending.
Conversely, half of the population – those who are healthiest – have little to no health care expenses, with these people accounting for only 3 percent of spending.
The Most Expensive Health Conditions to Treat
Any health condition that requires treatment, no matter how minor or serious it may be, will have a financial impact on the patient as well as the health system as a whole.
However, some health conditions are more expensive to treat than others.
Approximately 50 percent of all health care spending goes to treat a small number of diseases.
Diabetes leads the way in regards to total dollars spent, with this disease costing $101 billion in treatment and diagnosis in 2013.
Cancer is also high on the list, with costs reaching $50 billion for four of the most common types: breast cancer, colorectal cancer, non-melanoma skin cancer, and other neoplasms. This doesn’t include costs associated with other forms of the disease.
According to a new study by the American Heart Association, cardiovascular disease (CVD) will continue to have a big impact on the nation’s financial and health care systems.
The study notes that over the next 20 years, the number of Americans with cardiovascular disease will reach 131.2 million, which is almost half of the total population. Adding to this, costs associated with the disease are expected to reach $1.1 trillion.
The Cost of Prescription Drugs
While some people may only need a prescription from time to time, this is a way of life for many others.
A recent study by Express Scripts found that the average American spends $1,370 annually on prescription drugs. However, the study also found that more than 500,000 Americans spend as much as $50,000 and more than 100,000 people spend as much as $100,000.
Some medications are affordable, but there are others that cost hundreds or thousands of dollars.
To illustrate this point, here’s a list of the five most expensive prescription drugs:
- Harvoni (Hepatitis C drug): $87,800
- Sovaldi (Hepatitis C): $73,800
- Epclusa (Hepatitis C): $73,300
- Zepatier (Hepatitis C): $52,600
- Bexarotene (T-cell lymphoma treatment): $49,800
While a person with health insurance is not typically responsible for the entire cost of a prescription, the money still has to come from somewhere.
Keep in mind, too, that not all medical needs are covered by health insurance.
Commonly uncovered procedures include:
- Lasik surgery
- Plastic surgery
- Hearing aids
How to Manage Health Care Costs
Health insurance can help keep costs down. Unfortunately, most people find that their policy does not cover every expense and the out of pockets costs can be high even with insurance.
While you may prefer to pay cash for out of pocket medical expenses, this is not always possible. If you don’t have enough money on hand, a personal loan is an alternative to managing health care costs.
With a personal loan, you can do the following:
- Pay off medical debt
- Pay down the loan with a fixed monthly payment
- Access funds that can be used for other expenses
Health care costs in the United States are rising, which could have an impact on you in the near future. It’s a good idea to plan for anything that could come your way.