“PHI [Private Health Insurance] had the largest share of total health spending at 33.9 percent ($1,183.9 billion), as has been the case for the past four decades (Kane, 2017). Medicare spending accounted for 20.2 percent of total health spending ($705.9 billion) and Medicaid spending made up 16.7 percent ($581.9 billion). Out-of-pocket spending, which includes all payments made directly by all patients regardless of insurance status, was 10.5 percent of total health spending ($365.5 billion). Spending on other health insurance programs was 3.8 percent of total health spending ($132.6 billion) and spending on other third-party payers and programs and public health activity was 10.2 percent ($354.8 billion). These shares are within half a percentage point of what was observed in 2016 (see Rama, 2018).

“Spending growth

“The total spending growth in PHI, Medicare, and Medicaid over the 10-year period ending in 2017 are shown in Exhibits 4 through 6. Here, total spending is decomposed into per-enrollee spending and enrollment.4 The total spending growth for each payer is roughly equal to the sum of per-enrollee spending growth and enrollment growth. To help understand the trends seen in total spending growth, Exhibits 4 through 6 also include the enrollment and per-enrollee spending growth rates. As they will show, fluctuations in Medicare spending growth over the last decade were strongly tied to per-enrollee spending rates while fluctuations in Medicaid spending growth were more dependent on enrollment growth rates. PHI maintained a relatively stable spending growth rate due to both enrollment and per-enrollee spending fluctuating widely in opposite directions.

Exhibit 4 shows the growth rates for PHI. Between 2008 and 2011, spending growth for PHI remained stable at just below 4.0 percent. However, this stability masks fluctuations in enrollment growth that were offset by fluctuations in per-enrollee spending growth in the opposite direction. During this period, enrollment growth was negative, reaching a low of -3.1 percent in 2009; this was partly due to lost jobs during the recession (Hartman et al., 2010). In contrast, per-enrollee spending growth remained positive, peaking at 7.1 percent in 2009 when per-enrollee spending on prescription drugs and hospital services also peaked and spending per enrollee on benefits grew faster than premiums. The years 2010 and 2011 saw reduced growth in per-enrollee spending due to increases in cost sharing, a shift by consumers to lower-cost (less generous) plans, and slower growth in use of services (i.e. elective hospital procedures, prescriptions dispensed, and physician office visits). In those years, spending per enrollee on benefits grew slower than premiums (Martin et al., 2012).”

Source: Apoorva Rama, National Health Expenditures, 2017: The slowdown in spending growth continues, AMA Policy Research Perspectives, American Medical Association, 2019. https://www.ama-assn.org/about/research/trends-health-care-spending