U.S. Health Care Costs Rise Above $3 Trillion in 2014

All streaks are meant to be broken. The Centers for Medicare and Medicaid Services announced Dec. 2 that 2014 ended a multi-year trend of small health care cost increases.

According to the most recent CMS data, total U.S. health care spending hit $3.031 trillion in 2014. This translates to $9,523 per person and reflects a 5.3 percent increase in health care spending for the year. For comparison, health care spending rose just 2.9 percent in 2013, and averaged 3.7 percent from 2009 through 2013.

The Affordable Care Act and increases in prescription drug spending are the reasons for the sharp increase, said Anne B. Martin, a CMS economist and co-author of the report. The ACA made health care coverage accessible to more Americans, Martin explained. As a result, 5.4 million people a month – most of whom were uninsured before the legislation took effect – received coverage in 2014. In conjunction, prescription drug costs rose 12.2 percent to $297.7 billion. In 2013 drug costs rose by just 2.4 percent.

A rise in the cost of specialty medicines, particularly those used to treat hepatitis C, fueled the increase in prescription drug spending. Hep C drugs alone contributed $11.3 billion in spending, according to the report.