Cost of Health Care / 20.10.2013 Interview with: Gigi Cuckler Economist National Health Statistics Group Office of the Actuary, CMS 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. (more…)