|For Immediate Release||Contact|
From Health Affairs:
US Health Spending Projected to Grow an Average of 5.8 Percent Annually through 2022
Slow Growth is Predicted through 2013, with Higher Growth Thereafter from Expanded Health Coverage and Faster Economic Growth
Bethesda, MD -- New estimates released today from the Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS) project that aggregate health care spending in the United States will grow at an average annual rate of 5.8 percent for 2012-22, or 1.0 percentage point faster than the expected growth in the gross domestic product (GDP). The health care share of GDP by 2022 is projected to rise to 19.9 percent from its 2011 level of 17.9 percent.
The findings appear as a Health Affairs Web First article and will be published in the October issue. The article provides an analysis of how Americans are likely to spend their health care dollars in the coming decade, with projections for spending by different sectors, payers, and sponsors. The projections reflect a combination of factors affecting health care spending, including provisions of the Affordable Care Act (ACA) that increase health insurance coverage and forecasted changes in the nation's economy.
For 2013 health care spending growth is projected to remain under 4 percent because of the sluggish economic recovery, continued increases in cost-sharing requirements for the privately insured, and slow growth for Medicare and Medicaid spending.
But starting in 2014 growth in national health spending will accelerate to 6.1 percent, reflecting expanded insurance coverage through the ACA, through either Medicaid or the marketplaces. The use of medical services and goods, especially prescription drugs and physician and clinical services, among the newly insured is expected to contribute significantly to spending increases in Medicaid (12.2 percent) and private health insurance (7.7 percent). Out-of-pocket spending is projected to decline 1.5 percent in 2014 due to the new coverage and lower cost sharing for those with improved coverage.
By 2022 the ACA is projected to reduce the number of uninsured people by thirty million, add approximately 0.1 percentage points to average annual health spending growth over the full projection period, and increase cumulative health spending by $621 billion.
Analysis by the CMS Office of the Actuary of the past fifty years of National Health Expenditure Accounts data, which explores the relationship between economic and health spending growth, suggests that health spending growth is likely to accelerate once economic conditions improve markedly. "Although projected growth is faster than in the recent past," says Gigi Cuckler, the lead author for the study, "it is still slower than the growth experienced over the longer term."
Key national health expenditure projections for specific timeframes include the following:
In deriving its estimates, the report incorporates two major changes from previous projections. First, the estimates incorporate the June 2012 US Supreme Court ruling that made Medicaid eligibility expansion under health reform optional for the states. Second, the estimates presume that scheduled Medicare physician payment rate reductions under the Sustainable Growth Rate formula do not occur, including a 24.7 percent reduction as of January 1, 2014.
|About Health Affairs|
Health Affairs is the leading journal at the intersection of health, health care, and policy. Published by Project HOPE, the peer-reviewed journal appears each month in print, with additional Web First papers published periodically at www.healthaffairs.org. The full text of each Health Affairs Web First paper is available free of charge to all website visitors for a one-week period following posting, after which it switches to pay-per-view for nonsubscribers. Web First papers are supported in part by a grant from The Commonwealth Fund. You can also find the journal on Facebook and Twitter. Read daily perspectives on Health Affairs Blog. Download our podcasts, including monthly Narrative Matters essays, on iTunes. Tap into Health Affairs content with the new iPad app.