The healthcare sector fundamentals look favorable. According to actuaries at the Centers for Medicare and Medicaid Services, American spending on all healthcare increased 5.5% in 2014 year-over-year and is expected to grow 5.3% this year, reports Louise Radnofsky for the Wall Street Journal.
Looking ahead, in the years through 2024, spending growth is projected to average 5.8% and peak at 6.3% in 2020.
Additionally, the actuaries calculated that around 8.4 million Americans became insured in 2014 and noted their increased use of medical services. The number of people on Medicaid is projected to increase to 78.1 million by 2024, outstripping Medicare, which is expected to have 70.3 million enrolled.
Consequently, the greater demand for services could help bolster healthcare provider-related ETFs, like the iShares U.S. Healthcare Providers ETF (NYSEArca: IHF) and the equal-weight SPDR S&P Health Care Services ETF (NYSEArca: XHS). [Falling Uninsured Rate Helps Support Healthcare Sector, ETF Outlook]
For more information on the healthcare sector, visit our healthcare category.
Max Chen contributed to this article.