Healthcare Spending in the United States Shows Slowdown

Published Date : Dec 20, 2013

This trend could likely translate into heavier paychecks for American middle-class households and help the government save billions of dollars. Yet, no more than one in twenty Americans knows about it.

Currently, the national healthcare spending is rising at the slowest pace recorded yet. In the 1970s and 80s, the yearly health care expenditure grew over 10% annually, dipping slightly in the 90s and regaining its growth for a brief period thereafter only to turn downward again. Today, the annual spending stands at just 4% per year.

However, in a latest poll conducted by New York Times and CBS News, only 5% Americans said that expenditure on healthcare has moderated. Nearly 50% of the respondents said that healthcare costs have been rising at a faster rate of late—mainly because Americans are spending more of their personal incomes to address their healthcare needs. A case in point: the deductible component in Americans’ pay slips has become more common, but has also become more expensive.


Today, 38% Americans are enrolled in a health plan that comprises a $1000 deductible. This figure stood at 18% in 2008, states a survey conducted by the Henry J. Kaiser Family Foundation. And, between 2008 and 2013, the average deductible amount has grown from $735 to $1,097.

In a normal situation, the curtailed healthcare spending would mean that businesses dispense lower funds on health premiums and use the excess towards higher salary packages. In fact, this is what happened in the 1990s.

However, given the current weakening in the economy and the high unemployment rates, there is no real pressure on employers to raise pay scales. This has left households with stagnant earnings and a bigger share of personal healthcare expenses. This is likely the reason most Americans are unaware of what they could potentially gain from the national healthcare spending slowdown.