Consumer Spending on Healthcare - 4/30/14
After several years of decelerating healthcare spending, consumer spending on healthcare is beginning to climb rapidly again. According to the US Commerce Department, consumer spending on healthcare climbed by $20.4 billion at an inflation-adjusted annualized rate in February. About $13 billion of that increase was associated with outlays on health services spurred by the Patient Protection and Affordable Care Act of 2010.
As reported in Bloomberg, the Urban Institute estimated earlier this month that approximately 5.4 million people have acquired insurance since January. The share of uninsured adults 18 years old and older has declined 2.5 percentage points in the 21 states that have selected to expand Medicaid according to a recent Gallup report.
The fact that more people have coverage seems to be unleashing pent-up demand for medical procedures that are boosting out-of-pocket household spending on co-payments and prescriptions. The share of consumer budgets dedicated to medical care has been rising steadily since 2000 and achieved a record this February at 17.1 percent.