For the third consecutive year, the growth rate of health care spending among privately insured people under age 65 remained low at 4.0 percent, says the Health Care Cost Institute (HCCI). Health care spending averaged $4,701 per person with employer-sponsored coverage in 2012, up $181 from the year before. In addition, out-of-pocket spending rose more quickly than expenditures per person in 2012, increasing 4.8 percent to $768.

The 2012 Health Care Cost and Utilization Report provides a detailed picture of health care spending for the 156 million Americans younger than age 65 with employer-sponsored health insurance in 2012. This year’s report analyzes the actual dollars spent and services used by over 25 percent of the nation’s privately insured population.

Key trends:

  • Spending grew fastest for young adults, women, and people living in the Northeast.
  • Prescription drug and device spending per person grew 3.8 percent in 2012. Brand prices rose 25.7 percent and generic prices rose 5.3 percent.
  • Inpatient spending grew slower (2.4%) than any medical service category in 2012, while spending on outpatient services grew at the fastest rate (6.5%).
  • Forty-five percent ($82) of the additional dollars spent per person on health care in 2012 were due to more spending on outpatient care.
  • For the first time since the end of the recession, increases in expenditures for professional procedures and generic prescriptions were due mainly to increased use, not price.

“Although average health care expenditures grew at nearly the same rate in 2012 as 2011, the causes of the 4 percent increase in spending each year were quite different,” said HCCI Executive Director David Newman. “In prior years, rising health care prices drove up spending. In 2012, we saw utilization start to change health care trends for prescription drugs and professional procedures.”

The 2012 Health Care Cost and Utilization Report is available on the HCCI website at:

Read the full press release here.

The Health Care Cost Institute was launched in September 2011 supported by Aetna, Humana, Kaiser Permanente, and UnitedHealthcare to promote independent, nonpartisan research and analysis on the causes of the rise in U.S. health spending. HCCI believes an improved understanding of the forces driving health care cost growth will help policy makers, researchers, and the public make decisions that will lead to better and more accessible and affordable care. HCCI is governed by a board that includes distinguished economists, actuaries and health care experts. For more information, visit or follow us on Twitter @healthcostinst.


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