Residential and personal care spending tops $173.5 billion

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Retirees in most states may struggle to cover senior living costs, study suggests
Retirees in most states may struggle to cover senior living costs, study suggests

Spending on residential and personal care was $173.5 billion in 2016, according to the Centers for Medicare & Medicaid Services' National Health Expenditures report, published Wednesday by Health Affairs. The amount marked an annual growth rate of 5.3%.

The “other health, residential, and personal care” category in the report includes spending for Medicaid home- and community-based waivers, care provided in residential care facilities, ambulance services, school health and worksite healthcare, CMS said.

Overall, U.S. healthcare spending increased 4.3% and hit $3.3 trillion in 2016. Seventeen percent of that total, $565.5 billion, was spent by the Medicaid program at the federal, state and local level, according to the report.

Growth of Medicaid spending slowed in 2016, increasing by 3.9% compared with rates of 11.5% in 2014 and 9.5% in 2015 that were due in part to the initial effects of the Affordable Care Act's expansion of Medicaid enrollment during that time, CMS said. Federal Medicaid expenditures increased 4.4%, whereas at the state and local level, they grew 3.2% in 2016.

Hospital spending accounted for slightly more than one-third of all Medicaid spending in 2016, according to the report, but the second-largest category was “other health, residential, and personal care,” and spending in that category increased 5.7%, a slowdown from the 10.8% increase in 2015. The deceleration partly can be attributed to a slowdown in the growth of HCBS waivers, the authors stated.

Decelerated growth was seen in 2016 for all Medicaid-related goods and services except for continuing care retirement communities and nursing homes, according to the report.

Total Medicare expenditures reached $672.1 billion in 2016, which was 20% of total healthcare spending, CMS said. Medicare spending grew 3.6% in 2016, slowing from a rate of 4.8% in 2015.

Total spending at CCRCs and skilled nursing facilities was $162.7 billion in 2016, CMS said. The annual growth rate in expenses was 2.9%.

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