Reprieve over? Health spending projected to climb 6% next year

Sep 20 2013

The nation's health care spending is slated to rise about 6 percent next year, according to a new Centers for Medicare & Medicaid Services report. This follows five years of slower growth expected to end as the nation's economy recovers and the health law expands coverage. The spending increase is likely lower than it would have been, however, if the Supreme Court hadn't allowed states to choose whether to expand Medicaid, researchers wrote.

Kaiser Health News: Health Spending Over The Coming Decade Expected To Exceed Economic Growth 
The nation's total health spending will bump up next year as the health law expands insurance coverage to more Americans, and then will grow by an average of 5.8 percent a year over the next decade, according to projections released Wednesday by government actuaries. That estimate is lower than typical annual increases before the recession hit. Still, the actuaries forecast that in a decade, the health care segment of the nation's economy will be larger than it is today, amounting to a fifth of the gross domestic product in 2022 (Rau, 9/18).

Los Angeles Times: Health Spending To Rise Amid Coverage Expansion, Economic Growth
After five years of historically slow growth, the nation's health care tab is poised to grow again as the federal health care law expands coverage and the economy improves, according to a new government report. Total U.S. spending on health care is expected to surge over the next decade, hitting $5 trillion in 2022, independent economists at the federal Centers for Medicare and Medicaid Services estimate (Terhune, 9/18).

The Wall Street Journal: Lower Rise In Health Spending Predicted
Total U.S. health-care spending will jump by 6.1 percent next year when key provisions of the federal overhaul law take effect, a slower growth pace than previously had been expected, federal number-crunchers projected Wednesday. The Centers for Medicare and Medicaid Services said the rise would result from more Americans gaining insurance coverage and using more care. But it said the growth would be slower than the 7.4 percent pace anticipated a year ago, in part because of a June 2012 Supreme Court decision that allowed states to avoid expanding their Medicaid programs as envisioned under the health overhaul (Radnofsky, 9/18).

The Washington Post's Wonk Blog: Is Health Spending Slowing For Good? Medicare's Number-Crunchers Aren't So Sure.
Health-care costs have, for four years now, grown at a historically slow rate. Instead of outpacing the rest of the economy, as the health sector has for decades now, medical costs have risen at the exact same rate, if not a little bit slower. Today, we got some bad news: The Center for Medicare Services' Office of the Actuary, in a new report, does not expect this ultra-slow growth to last forever (Kliff, 9/18).

The Associated Press/Washington Post: Government Says Obama's Health Overhaul Will Accelerate Spending Growth To 6.1 Percent in 2014
The government attributes much of the increase next year to the new health care program, which is expected to provide insurance coverage to millions of currently uninsured Americans beginning Jan. 1 (9/18).

Reuters: U.S. Government Scales Back Obamacare Impact For 2014
The U.S. government on Wednesday scaled back its projections for Obamacare's impact in 2014, saying the law would generate slower health care spending growth and provide coverage to only half as many of America's uninsured as anticipated last year. The biggest factor in the change stems from the U.S. Supreme Court verdict last year allowing each state to decide whether to expand the public Medicaid program for the poor under President Barack Obama's health care reform law (Morgan, 9/18).

Bloomberg: Recession Not Health Law May Be Responsible For Cost Curb
The four-year slowdown in U.S. health-care spending will end next year, and there is no sign the Affordable Care Act will significantly curb the acceleration in costs, government actuaries said in a report. President Barack Obama has said the 2010 health-system overhaul helped curb national medical spending, which that year rose 3.9 percent, or about half pre-recession levels (Wayne, 9/19).

The Baltimore Sun: Health Spending TO Rise Amid Coverage Expansion, Economic Growth
After five years of historically slow growth, the nation's health care tab is poised to grow again as the federal health care law expands coverage and the economy improves, according to a new government report. Total U.S. spending on healthcare is expected to surge over the next decade, hitting $5 trillion in 2022, independent economists at the federal Centers for Medicare and Medicaid Services estimate (Terhune, 9/18).

Medpage Today: 6% Hike In Health Spending Forecast By CMS
Healthcare spending is projected to grow at 4 percent through this year but increase by 6.1 percent next year, ending a string of historically slow growth, government economists said Wednesday. The uptick in spending comes from expanded health coverage under the Affordable Care Act, which will cause physician services to grow by 7.1 percent next year, the Centers for Medicare and Medicaid Services said in the report published online in Health Affairs. Those newly covered are expected to be younger and healthier and, therefore, devote a higher percentage of their medical spending to physician services and prescription drugs than currently insured individuals, economists said (Pittman, 9/18).

Stateline: Medicaid Spending Set To Climb, But States Will Get Temporary Reprieve
Medicaid spending will climb next year by more than 12 percent to $490 billion, largely because of expanded eligibility under President Barack Obama's new federal health law, according to a new report. The state and local share of the increase (Medicaid is a joint state-federal program) will be minimal, because under the new health care law the federal government will cover 100 percent of the costs of the Medicaid expansion for three years. After that, however, the federal contribution will taper off until it reaches 90 percent in 2020. The annual report by the Centers for Medicare and Medicaid Services (CMS) predicts that state and local spending on Medicaid will increase next year by just half a percent, from $187.6 billion to $198.1 billion. However, by 2022, state Medicaid costs are expected to rise to $340 billion, an increase of about 81 percent (Ollove, 9/18).

Politico: CMS Actuaries: ACA Helps Put End To Health Spending Slowdown 
The recent era of dramatically lower growth in health care spending is coming to a close, and Obamacare is one of the reasons why, according to a government report released Wednesday. Spending growth is expected to remain very low this year -- about 4 percent -- before Obamacare's major insurance expansions take effect next year. But in 2014, it will jump to 6.1 percent under the health care law -- 1.6 percent of that from Obamacare -- and average nearly 6 percent through 2022. Obamacare is expected to boost the ranks of the insured through the Medicaid expansion and subsidies for those who qualify on the new insurance exchanges, not to mention the requirement that most Americans buy insurance. And people who are insured tend to use more health care (Norman, 9/18).

And Medicare's cost is also examined --

NPR: Americans' Upside-Down View Of Medicare's Problems
Medicare is big. And as America gets grayer, the health insurance program for seniors and the disabled is going to get a lot bigger -- and more expensive. About 51 million Americans were covered by Medicare in 2012, at a cost of around $574 billion, or about 3.6 percent of the nation's gross domestic product. By 2023, about 70 million people will get health care paid for by Medicare, and their tab is expected to hit $1.1 trillion (Hensley, 9/18).