Growth of Health Care Spending Slowed Last Year

Federal spending on health care shot up nearly 11 percent in 2014, mainly because of the expansion of Medicaid, but the growth has slowed every year since then, the report said. Federal spending on health care totaled nearly $1 trillion last year, and that does not count the huge tax subsidies for health care and coverage.

Spending on Medicaid, which now covers more than 70 million low-income people and is financed jointly by the federal government and the states, continued to grow in 2017, reaching a total of $582 billion, the report said. But the rate of growth slowed for the third straight year.

Medicaid spending — the total of federal, state and local funds combined — increased last year by 2.9 percent, following growth of 11.8 percent in 2014, then 9 percent in 2015 and 4.2 percent in 2016, the administration reported.

President Trump and Republicans in Congress tried last year to roll back the expansion of Medicaid, but ultimately failed.

Federal Medicaid payments increased less than 1 percent last year, following growth of 4.6 percent in 2016 and double-digit growth in 2014 and 2015.

Despite alarm over high drug prices, the administration reported that spending on prescription drugs at pharmacies, grocery stores and other retail outlets increased last year by just four-tenths of 1 percent, to $333 billion. That was the slowest growth since 2012, when many blockbuster drugs lost patent protection, driving down prices and total spending.

Those figures do not include spending on drugs in hospitals, where patients receive some of the most expensive drugs.