CMS: Growth in health spending remains low

Tuesday, January 7, 2014

WASHINGTON – Overall national health expenditures grew at an annual rate of 3.7% in 2012, marking the fourth consecutive year of low growth, the CMS Office of the Actuary reported Jan. 7.

Health spending as a share of gross domestic product fell slightly from 17.3% in 2011 to 17.2% in 2012.

“For the second straight year, we have seen overall healthcare costs grow slower than the economy as a whole,” said CMS Administrator Marilyn Tavenner in a release. “This is good news. We will continue to work with tools given to us by the Affordable Care Act that will both help us control costs for taxpayers and consumers, while increasing the quality of care.”

The Office of the Actuary’s report has been published on the CMS National Health Expenditures website and has been featured in an article in the January issue of Health Affairs.

Continued low growth in 2012 was driven by slower growth in prescription drug, nursing home, private health insurance and Medicaid expenditures. The ACA also contributed to slow growth, but it had a limited impact on overall spending as it was still being implemented in 2012, according to the report.

Despite a large up tick in enrollment, Medicare spending growth slowed slightly in 2012, increasing 4.8% for the year compared to 5% in 2011. Total Medicare spending per enrollee grew by only 0.7% in 2012, the report states.

Total Medicaid spending grew 3.3% in 2012. While an increase over 2011, it still represents historically low overall growth rates tied to improved economic conditions, as well as efforts by states to control costs, the report states.