CMS: U.S. healthcare spending to rebound after 2014
Article Thumbnail ImageSeptember 18, 2013 -- Healthcare spending in the U.S. is expected to rebound between 2014 and 2022 to growth rates seen prior to the recent economic slowdown. Rates will be higher than in the recent past but lower compared to longer-term historical growth, according to a report published online September 18 in Health Affairs.

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  • The rebound will be driven by improving economic conditions in the U.S., coverage expansion due to the Affordable Care Act, and the baby boomer generation's increased demand for healthcare, wrote staff at the U.S. Centers for Medicare and Medicaid Services (CMS) (Health Affairs, September 18, 2013).

    "Over the 2012 to 2022 period, national health spending is projected to grow at an average annual rate of 5.8%," wrote lead author Gigi Cuckler and colleagues. "By 2022, health spending financed by federal, state, and local governments is projected to account for 49% of national health spending and to reach a total of $2.4 trillion."

    However, government spending as a percentage of the overall health budget won't be that much higher than it was in 2012, when it was 45%, Cuckler said in a press conference held on September 18.

    The report's estimates differ compared to prior projections because the data incorporate the June 2012 U.S. Supreme Court ruling that made Medicaid eligibility expansion under health reform optional for states. The report also assumes no payment rate updates under the sustainable growth rate (SGR) formula, including the 24.7% reduction that is scheduled go into effect January 1, 2014.

    In its analysis, CMS made projections by year, estimating that the rate of U.S. health spending growth in 2013 should remain below 4% -- continuing a trend that started in 2009.

    "Health spending growth through 2013 is expected to remain slow because of the sluggish economic recovery, continued increases in cost-sharing requirements for the privately insured, and slow growth for public programs," Cuckler and colleagues wrote.

    In 2014, the rate will accelerate to 6.1%, due to the expanded insurance coverage that will become available through the Affordable Care Act. CMS expects the rate to remain near 6% in 2015, due to continued effects of the insurance expansion and an expected acceleration of the economic recovery, they wrote.

    "Over the whole projection period, national health spending is estimated to grow ... one percentage point faster than the average economic growth during the period," the group wrote. "As a result, the share of the GDP devoted to healthcare is projected to rise from 17.9% in 2012 to roughly a fifth of the GDP by 2022."


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