20 Oct CMS Health Care Spending Projections 2012-22
MedicalResearch.com Interview with:
Gigi Cuckler
Economist
National Health Statistics Group
Office of the Actuary, CMS
MedicalResearch.com: What are the main findings of the study?
Answer: Below we provide the major findings, but it’s important to note that these estimates incorporate two substantial changes from prior projections.
- First, the estimates incorporate the June 2012 US Supreme Court ruling that made the Medicaid eligibility expansion under health reform optional for states.
- Second, unless otherwise stated, the estimates focus on an outlook for spending in which the scheduled Medicare physician payment rate updates under the Sustainable Growth Rate formula do not occur. The following are highlights from our most recent report:
- Over the projection period, 2012-22, national health spending is projected to grow at an average rate of 5.8 percent, which is 1.0 percentage point faster than expected average annual growth in the economy over the period. Consequently, the health share of GDP is projected to increase from 17.9 percent in 2011 to 19.9 percent of the economy by 2022.
- In the near term of the projection, through 2013, national health spending growth is expected to remain just under 4.0 percent due to the sluggish economic recovery, continued increases in cost-sharing requirements for the privately insured, and low growth for Medicare and Medicaid.
- However, in 2014, national health spending growth is projected to accelerate to 6.1 percent, reflecting the expanded insurance coverage that will become available through the Affordable Care Act.
- After 2014 through the remainder of the projection period, national health spending is projected to grow 6.2 percent per year on average, largely as a result of the continued implementation of the coverage expansions under reform, faster projected economic growth, the aging of the population, and the end of the sequester.
- While projected health spending growth is faster compared to recent experience, it is still slower than the growth experienced over the longer-term history.
MedicalResearch.com: Were any of the findings unexpected?
Answer: Though our projections this year are similar to the projections that we have published in the past, our projection for national health spending growth in 2014 this year is lower than in past projections. While this may not necessarily be unexpected given the June 2012 Supreme Court decision regarding the Affordable Care Act, this lower rate of growth for 2014 is a particularly notable finding. Last year, we projected national health spending growth of 7.4 percent for 2014, compared to 6.1 percent in this year’s projection. This lower projected growth is mostly explained by the assumption last year that every state would expand their Medicaid program in 2014, whereas in this year’s projections, the Medicaid expansion is treated as optional for states (based on the June 2012 Supreme Court decision regarding the Affordable Care Act). Last year we were expecting 22 million to gain coverage in 2014, while this year we are projecting 11 million to gain coverage in 2014 (more information on this is provided in the next question).
MedicalResearch.com: What should clinicians and patients take away from your report?
Answer: Some notable takeaways from the report are the health care sectors most impacted by health reform as well as the anticipated health insurance enrollment gains as a result of reform. In 2014, 11 million Americans are projected to gain health insurance coverage under the Affordable Care Act, predominantly through either Medicaid or the Health Insurance Marketplaces, with an additional eight million Americans expected to gain coverage during 2015. These expansions of health insurance coverage are projected to increase the demand for health care, particularly for prescription drugs and physician and clinical services. By 2022, the health insurance coverage expansions under reform are projected to reduce the number of uninsured people by 30 million.
MedicalResearch.com: What recommendations do you have for future research as a result of this study?
Answer: These projections remain subject to substantial uncertainty, given the variable nature of future economic trends and a lack of historical experience with many forthcoming health system reforms. In particular, the supply-side effects of the Affordable Care Act, such as changes in providers’ behavior in reaction to an influx of newly insured patients, remain highly speculative and are not included in these estimates. Thus, the supply-side response to the major coverage expansions under the Affordable Care Act, in terms of quantity of providers available (for example, the number of physicians, nurses, and other healthcare practitioners to provide primary care services) and the costs of services provided after an influx of newly insured patients in 2014 is an important area for future research.
Citation:
Cuckler GA, Sisko AM, Keehan SP, Smith SD, Madison AJ, Poisal JA, Wolfe CJ, Lizonitz JM, Stone DA.
Health Aff (Millwood). 2013 Oct;32(10):1820-31. doi: 10.1377/hlthaff.2013.0721. Epub 2013 Sep 18.
Last Updated on December 5, 2013 by Marie Benz MD FAAD