Medicare spending growing at slower rate

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Medicare spending slowed to a 4.5% growth rate in 2015, even as payments for nursing homes increased, according to a new analysis.

At more than $646 billion, Medicare spending makes up 20% of total health expenditures in the United States, according to the Office of the Actuary at the Centers for Medicare & Medicaid Services. Total healthcare spending grew at 5.8% last year and reached $3.2 trillion.

The analysis appeared in a Health Affairs Web First article released Friday.

Medicare spending for nursing home care increased 5.6% in 2015, compared to 2.5% in 2014. 

Fee-for-service Medicare expenditures increased almost 2% last year, to 68%. While growth was slower than in 2014, fee-for-service enrollment was up slightly, by 0.3%, in 2015. Medicare Advantage enrollment increased 7.6% in 2015, declining from a growth of 10% the previous year.

Meanwhile, Medicaid's growth rate of 9.7% was slower than in 2014, as was the rate of enrollment. In 2014, due to Affordable Care Act changes, enrollment increased by more than 11%, compared to 5.7% last year.

While there was less Medicaid spending for physicians, clinical services and prescription drugs, hospital care and other healthcare services increased at a faster rate in 2015.

Private health insurance spending increased 7.2%, officials noted, and continues to be the largest payer of healthcare. The rate of enrollment of individuals in employer-sponsored health plans rose by 1.4% last year, reflecting an improving labor market.

The analysis will appear in the January 2017 issue of Health Affairs.