Health spending ‘on the right track,’ says CMS

Thursday, September 19, 2013

WASHINGTON – Growth in U.S. healthcare spending over the next 10 years will be modest in comparison to historical trends, according to a Sept. 18 report from the CMS Office of the Actuary.

The report credits the Affordable Care Act (ACA) and decreased spending on prescription drugs and physician services with moderating health spending, even as health care becomes more accessible and more baby boomers enter the Medicare program. 

Among the report’s key findings: Growth in healthcare spending is estimated to have slowed to 4.6% in 2012, down from 6.2% in 2011, for a total of $579.9 billion.

“We are on the right track to controlling health care costs, thanks in part to the Affordable Care Act,” stated CMS Administrator Marilyn Tavenner in a release. “More Americans will have the ability to get the health care they need, and that is a good thing. We have identified several areas where our reforms to control costs are making progress and we must build on those efforts in the years ahead.”

Other findings from the report:

• By 2022, out-of-pocket spending is projected to fall from 11.4% in 2012 to 9.1%, largely as a result of expanded insurance coverage through Medicaid and the insurance marketplaces.

• From 2015 to 2022, growth in total hospital spending is projected to average 6.3% per year.

• In 2012, prescription drug spending is estimated to have declined 0.8%, which is down from growth of 2.9% in 2011, as several popular brand name drugs lost patent protections.

• Spending on physician and clinical services is estimated to have grown 4.6% in 2012, compared to 4.3% in 2011.

• Per enrollee, Medicaid spending is expected to decline by 2.8% in 2013, due to the entry of non-disabled children and younger and non-disabled adults into the Medicaid program.

The report is available online and will be published in the October issue of the journal Health Affairs.