CMS: ACA spurs growth in health spending

But growth is still lower than most prior years
Thursday, December 3, 2015

WASHINGTON – Overall national health expenditures grew by 5.3% in 2014, as millions of uninsured Americans gained health coverage through the Affordable Care Act, the CMS Office of the Actuary reported Dec. 2.

The report also credits rapidly rising prescription drug costs for the growth.

“Still, the rate of growth remains below the level in most years prior to the coverage expansion, while out-of-pocket costs grew at the fifth lowest level on record,” said CMS Acting Administrator Andy Slavitt in a release.

Overall, health care spending grew 1.2% faster than the overall economy in 2014, resulting in an increase in the health spending share of gross domestic product from 17.3% in 2013 to 17.5% in 2014, the report states. In the decade before the ACA, healthcare spending grew 6.9% annually, 2.8% faster than the overall economy. 

Medicare spending grew 5.5% in 2014 compared to 3% in 2013. Total Medicare spending per enrollee grew by 2.4% in 2014, the report states.

Total Medicaid spending grew 11% in 2014, compared to 5.9% in 2013, due to the coverage expansion under the ACA, the report states.

“Today’s report reminds us that we must remain vigilant in focusing on delivering better health care outcomes, which leads to smarter spending, particularly as costs increase in key care areas, like prescription drugs costs,” said Slavitt.