|For Immediate Release||Contact|
From Health Affairs:
Health Spending Growth to Increase Slightly, But Remain Moderate Compared to Pre-Recession Highs
Expanded Insurance Coverage, Aging Population, and Economic Growth Are Primary Drivers of Projected Increase
Bethesda, MD--New estimates released today from the Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS) project a 5.5 percent rate of health spending growth for 2014, consistent with previous predictions. The average rate of longer-term projected growth is 5.8 percent for 2014-24, exceeding the expected average growth in gross domestic product (GDP) by 1.1 percentage points.
Expanded health insurance coverage for Americans through the Affordable Care Act (ACA), stronger economic growth relative to the recent past, and the aging of the US population are primary contributing factors to health spending growth for the entire projection period.
Every year CMS's Office of the Actuary releases an analysis of how Americans are likely to spend their health care dollars in the coming decade. The predicted 5.8 percent growth rate is slightly higher than the 5.7 percent growth rate predicted for 2013-23 in the Office of the Actuary's 2014 report, published last year in Health Affairs. The new findings appear as a Health Affairs Web First article and will appear in the journal's August issue.
The study link will be: http://content.healthaffairs.org/lookup/doi/10.1377/hlthaff.2015.0600.
"After six years of national health spending growth hovering near historically low rates, we're projecting faster growth in health spending over the next decade reflecting expanded insurance coverage under the ACA, expectations of continued improvements in the economy, and population aging," says Sean Keehan, the study's lead author. "However, these projected growth rates are significantly lower than those observed over the three decades prior to the recent recession."
Keehan and his coauthors predict that longer-lasting factors will result in relatively modest projected health spending growth over the decade ahead--eventually averaging close to 6 percent per year, compared to an average of about 9 percent over the three decades prior to the economic recession.
The authors note that these projections are subject to substantial uncertainty related to the continuing effects of the ACA--including the behavioral response to health reform on the part of consumers, insurers, providers, and employers throughout the projection period. They are also subject to influence by variable macroeconomic conditions, such as changes in overall economic growth, economywide price growth, or unemployment rates. The Office of the Actuary's projections are based on analysis of more than fifty years of national health expenditure data.