CMS: Healthcare spending growth to hit 5.8% by 2024, driven by pricey drugs

U.S. healthcare spending is expected to grow by 5.8 percent through 2024, the Centers for Medicare and Medicaid Services said on Tuesday, driven by the rise of expensive specialty drugs and higher insured rates under the Affordable Care Act.

U.S. healthcare spending is expected to grow by 5.8 percent through 2024, the Centers for Medicare and Medicaid Services said on Tuesday, driven by the rise of expensive specialty drugs and higher insured rates under the Affordable Care Act.

Still, CMS said the rate would still be lower than the 9 percent growth in healthcare costs seen in the three decades before 2008. At the same time, out-of-pocket costs for consumers is expected to drop from 11.3 percent of health expenses to 10 percent in 2024.

"Growth in overall health spending remains modest even as more Americans are covered, many for the first time. Per-capita spending and medical inflation are all at historically very modest levels," Acting CMS  Administrator Andy Slavitt said in a statement.

[Also: CMS spent $103 billion on Medicare Part D in 2013]

According to CMS, 2014 health spending will hit $3.1 trillion, or $9,695 per person, in 2014, a 5.5 percent growth from the prior year. However, prescription drug costs grew 13 percent in 2014.

New drug treatments for diseases like Hepatitis C and cancer are beginning to drive up drug spending. For example, leukemia drug Blincyto can cost more than $178,000 a patient.

Follow Healthcare Finance on Twitter and LinkedIn.

But despite 2014  growth in drug spending, CMS said medical price inflation in 2014 held at 1.4 percent, the same growth rate seen in hospital services.

Medicaid expansion is also driving up spending by 12 percent in 2014, though on a per capita basis spending fell by 0.8 percent because many new enrollees are healthier.

CMS also said it expects the number of uninsured to fall by 18 million over the next 11 years.

Twitter: @HenryPowderly