Healthcare cost and utilization

Healthcare Cost and Utilization In 2015, U.S. health care costs were $3.2 trillion. That makes health care one of the country's largest industries, equaling to 17.8 percent of gross domestic product. In comparison, health care cost $27.2 billion in 1960. That translates to an annual health care cost of $9,990 per person in 2015 versus just $146 per person in 1960. Health care costs have risen faster than the annual income. Health care consumed 4 percent of earnings in 1960 compared to 6 percent in 2013.

The two causes of this massive increase were government policy and lifestyle changes. First, the United States relies on company-sponsored private health insurance. The government created programs like Medicare and Medicaid to help those without insurance. These programs spurred demand for health care services. That gave providers the ability to raise prices. Other efforts to reform health care and cut costs raised them instead. On the other hand, chronic illnesses, such as diabetes and heart disease, have increased. They are responsible for 85 percent of health care costs. Almost half of all Americans have at least one of them and they are expensive and difficult to treat. As a result, the sickest 5 percent of the population consume 50 percent of total health care costs. The healthiest 50 percent only consume 3 percent of the health care costs.

How to estimate your yearly total costs of care In order to pick a plan based on your total costs of care, you’ll need to estimate the medical services you’ll use for the year ahead. Of course it’s impossible to predict the exact amount so you should think about how much care you usually use.

For example, before you compare plans you can choose each family member’s expected medical use as low, medium, or high.When you view plans, you’ll see an estimate of your total costs — including monthly premiums— based on your household’s expected use of care.Your actual expenses will vary, but the estimate is useful for comparing plans’ total impact on your household budget.

What the average American spends a year The average American spent $9,596 on healthcare in 2012, which was up significantly from $7,700 in 2007.It was also more than twice the per capita average of other developed nations, but still, in 2015, experts predicted continued sharp increases: "Health care spending per person is expected to surpass $10,000 in 2016 and then march steadily higher to $14,944 in 2023.Also, average annual costs per person hit $10,345 in 2016.

In 2016, premiums for individual coverage averaged $321 per month while premiums for family plans averaged $833 per month. The average annual deductible for individual plans was $4,358 and the average deductible for family plans was $7,983.That means that, last year, the average family paid $9,996 for coverage alone, and, if they met their deductible, a total of just under $18,000.Meanwhile, an average individual spent $3,852 on coverage and, if she spent another $4,358 to meet her deductible, a total of $8,210.

The price of medical care is the single biggest factor behind U.S. healthcare costs, accounting for 90% of spending. These expenditures reflect the cost of caring for those with chronic or long-term medical conditions, an aging population and the increased cost of new medicines, procedures and technologies. Also, healthcare reform law has expanded access to insurance to millions of Americans. We’ve transitioned to a healthcare system in which everyone can obtain health insurance regardless of age or health status, and many individuals need ongoing medical attention.