CMS Predicts U.S. Health Care Spending Will Increase by 6.1% in 2014
U.S. health spending in 2014 is projected to increase by 6.1% -- which is lower than previously projected -- once key provisions in the Affordable Care Act take effect next year, according to a report published Wednesday in Health Affairs by the CMS Office of the Actuary, the Wall Street Journal reports.
The projected growth is lower than an early-June 2012 estimate of 7.4%, because the Supreme Court later that month ruled that states could opt out of the ACA's Medicaid expansion, the Journal reports (Radnofsky, Wall Street Journal, 9/18).
The 2012 report predicted that about 20 million people would enroll in Medicaid next year under the expansion, but the new report lowers that figure to about 8.7 million. Overall, the new report projects that only about 11 million people are expected to drop off the uninsured rolls next year once key provisions of the ACA are implemented, down from about 22 million that were projected in last year's report (Morgan, Reuters, 9/18).
The new report also attributes the lower projected cost growth to a slower growth in the overall economy and the effects of Medicare payment reductions under the ACA (Kliff, "Wonkblog," Washington Post, 9/18). Federal analysts also predict that total U.S. health care expenditures will increase from $2.9 trillion this year to $3.1 trillion next year -- and to $5 trillion by 2020, which would make up 19.9% of the nation's economy, up from 18% now (Wall Street Journal, 9/18).
Meanwhile, some analysts are urging caution against the possible assumption that the slowdown in health spending growth will last for several years, the Washington Post's "Wonkblog" reports.
Stephen Heffler, a CMS economist, said, "The work we've done has shown there's a strong relationship [between economic downturns and slower health spending]." He added, "Until we have evidence that it's been broken, it is difficult for us to conclude that something structural has occurred" ("Wonk Blog," Washington Post, 9/18).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.