major dramatic increase health care costs group answer choices

Which of the following is a major cause for the dramatic increase in health care costs in the US since 1980 Group of answer choices?

The average American household spent almost $5,000 per person on health care last year.

That's a 101% increase from the roughly $2,500 per person that Americans spent about 34 years ago in 1984, according to an analysis of the Bureau of Labor Statistics Consumer Expenditures Survey by data company Clever. To make accurate comparisons, Clever adjusted all dollar amounts for inflation.

It's perhaps not surprising that health care expenses have risen over the past three decades. But the main driver of the increase is not drug costs or medical services. In fact, the costs related to medical services have decreased by about a third since the 1980s.

The biggest reason for the increase is insurance costs, which have grown by 740% since 1984, Clever calculates. The average American paid about $3,400 for insurance alone in 2018.

It's worth noting that Clever's analysis looks at the average cost of health care across all Americans, no matter how they get their coverage. But over half of Americans rely on their employer for health insurance, so typically employees do not pay the full cost.

Individuals who rely on employer-based insurance benefits are paying an average of $1,242 in out-of-pocket costs, according to Kaiser Family Foundation's annual employer benefits survey. Overall, the average premium for a single American is about $7,188 for 2019, with employers carrying a significantly larger portion of the overall expense.

Employer-based insurance for families costs about $20,576 this year, about a 5% increase from last year. Yet families are still on the hook for an average of $6,015 in out-of-pocket expenses, which is about a 71% increase over the past 10 years.

These increases in insurance premiums have actually outpaced wages, which grew by about 3.4% over the past year and 26% over the past decade, according to Kaiser. Experts agree that wages are not keeping pace with the rising costs of health care.

"There is growing evidence that cost protections have eroded for those who have employer-sponsored health coverage, putting the burden of health care costs on workers and their families," says David Blumenthal, president of the health care policy foundation The Commonwealth Fund.

The burden that health care expenses place on many Americans has prompted several politicians, including Democratic presidential candidates Senators Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.) to propose all-encompassing "Medicare for All" plans that aim to eliminate out-of-pocket costs.

Yet it's difficult to predict exactly how much Americans would pay with a Medicare for All plan. On the surface, the average person currently spends less on out-of-pocket costs when using a private, employer-based insurance than Medicare. But Medicare currently serves a predominantly elderly population who typically require more health care and therefore spend more.

Beyond the uncertainty around what a dramatic overhaul would mean for Americans' health care options, critics and even supporters of the Medicare for All proposals also question how the country would pay for such a system.

"Medicare for All would require a major change in the way in which health coverage and care is organized and financed in the U.S.," Tricia Neuman, director of Kaiser's program on Medicare policy, said during a testimony in front of Congress earlier this year.

Don't miss: Lawmakers aim to make it easier to save for health care expenses

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Historical NHE, 2020:

  • NHE grew 9.7% to $4.1 trillion in 2020, or $12,530 per person, and accounted for 19.7% of Gross Domestic Product (GDP).
  • Medicare spending grew 3.5% to $829.5 billion in 2020, or 20 percent of total NHE.
  • Medicaid spending grew 9.2% to $671.2 billion in 2020, or 16 percent of total NHE.
  • Private health insurance spending declined 1.2% to $1,151.4 billion in 2020, or 28 percent of total NHE.
  • Out of pocket spending declined 3.7% to $388.6 billion in 2020, or 9 percent of total NHE.
  • Federal government spending for health care grew 36.0% in 2020, significantly faster than the 5.9% growth in 2019. This faster growth was largely in response to the COVID-19 pandemic.
  • Hospital expenditures grew 6.4% to $1,270.1 billion in 2020, slightly faster than the 6.3% growth in 2019.
  • Physician and clinical services expenditures grew 5.4% to $809.5 billion in 2020, faster growth than the 4.2% in 2019.
  • Prescription drug spending increased 3.0% to $348.4 billion in 2020, slower than the 4.3% growth in 2019.
  • The largest shares of total health spending were sponsored by the federal government (36.3 percent) and the households (26.1 percent).   The private business share of health spending accounted for 16.7 percent of total health care spending, state and local governments accounted for 14.3 percent, and other private revenues accounted for 6.5 percent.

For further detail see NHE Tables in downloads below.

Projected NHE, 2019-2028:

  • National health spending is projected to grow at an average annual rate of 5.4 percent for 2019-28 and to reach $6.2 trillion by 2028. 
  • Because national health expenditures are projected to grow 1.1 percentage points faster than gross domestic product per year on average over 2019–28, the health share of the economy is projected to rise from 17.7 percent in 2018 to 19.7 percent in 2028. 
  • Price growth for medical goods and services (as measured by the personal health care deflator) is projected to accelerate, averaging 2.4 percent per year for 2019–28, partly reflecting faster expected growth in health sector wages. 
  • Among major payers, Medicare is expected to experience the fastest spending growth (7.6 percent per year over 2019-28), largely as a result of having the highest projected enrollment growth.
  • The insured share of the population is expected to fall from 90.6 percent in 2018 to 89.4 percent by 2028.

For further detail see NHE projections 2019-2028 in downloads below.

NHE by Age Group and Gender, Selected Years 2002, 2004, 2006, 2008, 2010, 2012, and 2014:

  • Per person personal health care spending for the 65 and older population was $19,098 in 2014, over 5 times higher than spending per child ($3,749) and almost 3 times the spending per working-age person ($7,153).
  • In 2014, children accounted for approximately 24 percent of the population and about 11 percent of all PHC spending.
  • The working-age group comprised the majority of spending and population in 2014, almost 54 percent and over 61 percent respectively.
  • The elderly were the smallest population group, nearly 15 percent of the population, and accounted for approximately 34 percent of all spending in 2014.
  • Per person spending for females ($8,811) was 21 percent more than males ($7,272) in 2014.
  • In 2014, per person spending for male children (0-18) was 9 percent more than females.  However, for the working age and elderly groups, per person spending for females was 26 and 7 percent more than for males.

For further detail see health expenditures by age in downloads below.

NHE by State of Residence, 1991-2020:

  • In 2020, per capita personal health care spending ranged from $7,522 in Utah to $14,007 in New York.   Per capita spending in New York state was 37 percent higher than the national average ($10,191) while spending in Utah was about 26 percent lower.  
  • Health care spending by region continued to exhibit considerable variation. In 2020, the New England and Mideast regions had the highest levels of total per capita personal health care spending ($12,728 and $12,577, respectively), or 25 and 23 percent higher than the national average.   In contrast, the Rocky Mountain and Southwest regions had the lowest levels of total personal health care spending per capita ($8,497 and $8,587, respectively) with average spending 17 and 16 percent lower than the national average, respectively.
  • Between 2014 and 2020, average growth in per capita personal health care spending was highest in New York at 6.1 percent per year and lowest in Wisconsin at 3.0 percent per year (compared with average growth of 4.3 percent nationally).
  • The spread between the highest and the lowest per capita personal health spending across the states has remained relatively stable over 2014-20. Accordingly, the highest per capita spending levels were 90 to 100 percent higher per year than the lowest per capita spending levels during the period.
  • Medicare expenditures per beneficiary were highest in Florida ($13,652) and lowest in Vermont ($8,726) in 2020.
  • Medicaid expenditures per enrollee were highest in North Dakota ($12,314) and lowest in Georgia ($4,754) in 2020.

For further detail, see health expenditures by state of residence in downloads below.

NHE by State of Provider, 1980-2020:

  • Between 2014 and 2020, U.S. personal health care spending grew, on average, 4.8 percent per year, with spending in Arizona growing the fastest (6.6 percent) and spending in Vermont growing the slowest (2.7 percent).
  • In 2020, California’s personal health care spending was highest in the nation ($410.9 billion), representing 12.2 percent of total U.S. personal health care spending. Comparing historical state rankings through 2020, California consistently had the highest level of total personal health care spending, together with the highest total population in the nation. Other large states, New York, Texas, Florida, and Pennsylvania, also were among the states with the highest total personal health care spending.
  • Wyoming’s personal health care spending was lowest in the nation (as has been the case historically), representing just 0.1 percent of total U.S. personal health care spending in 2020. Vermont, North Dakota, Alaska, and Montana were also among the states with the lowest personal health care spending in both 2020 and historically. All these states have smaller populations.
  • Gross Domestic Product (GDP) by state measures the value of goods and services produced in each state. Health spending as a share of a state’s GDP shows the importance of the health care sector in a state’s economy. As a share of GDP, West Virginia ranked the highest (28.7 percent) and Washington state the lowest (11.7 percent) in 2020.  

For further detail, see health expenditures by state of provider in downloads below.

Downloads

  • Health expenditures by state of residence: summary tables (ZIP)
  • Health expenditures by state of provider: summary tables (ZIP)
  • NHE Tables (ZIP)
  • Age and Gender Tables (ZIP)
  • NHE Projections 2019-2028 - Tables (ZIP)

Which of the following is a major cause for the dramatic increase in health care costs since 1980?

But the main driver of the increase is not drug costs or medical services. In fact, the costs related to medical services have decreased by about a third since the 1980s. The biggest reason for the increase is insurance costs, which have grown by 740% since 1984, Clever calculates.

What is causing the increasing in health care costs?

Five factors contribute to the rise in health care costs in the US: (1) more people; (2) an aging population; (3) changes in disease prevalence or incidence; (4) increases in how often people use health care services; and (5) increases in the price and intensity of services.

Which of the following is a major cause for the dramatic increase in health care costs in the US since 1980 quizlet?

What is the most important factor leading to rising health care costs in the United States since 1980? The increased use of expensive medical technology.

What is a reason that healthcare costs are rising quizlet?

Three factors contribute to the rising healthcare costs; a fragmented system that multiplies administrative costs (track patient expenses and bills to multiple insurers), the power that health care providers have over consumers, and the for-profit basis of the health care system.

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