U.S. Health Care Spending Growth Slows to Lowest Rate Ever Tracked

The health care spending growth rate was 1.3% between 2010 and 2013, the lowest three-year growth margin since the metric was first calculated in 1965, according to a White House Council of Economic Advisers report released Wednesday, The Hill's "Healthwatch" reports (Easley, "Healthwatch," The Hill, 11/20). The findings were based on previously released CMS data (Adams, CQ HealthBeat, 11/20).

The White House attributed the low growth rate in large part to changes under the Affordable Care Act.  CEA Chair Jason Furman wrote in the report that the since the cost slowdown "has persisted so long even as the economy is recovering, the fact that it is reflected in health care prices -- not just utilization or coverage, and that fact that it has also shown up in Medicare -- which is more insulated from economic trends, all imply that the current slowdown is the result of more than just the recession and its aftermath." He continued, "Rather, the slowdown appears to reflect 'structural' changes in the [U.S.] health care system" under the ACA ("Healthwatch," The Hill, 11/20).

Specifically, the report said that ACA provisions that lower Medicare overpayments for the elderly to private insurers and medical providers have helped curb health care costs. In addition, the report noted that ACA reforms have decreased hospitals' readmission rates (Felsenthal, Reuters, 11/20).

However, Brendan Buck, a spokesperson for House Speaker John Boehner (R-Ohio), in a tweet said the slowdown was the result of a poor economy ("Healthwatch," The Hill, 11/20). In an email, Buck wrote that non-partisan government "actuaries report [the slowdown] is a result of the terrible economy under President Obama, not his health care law." He added, "The White House is, in effect, celebrating its own failure to create jobs."

Conflicting Reports on Employer Health Care Costs

The CEA report stated that employers should expect to spend less on providing health coverage for their workers, Reuters reports (Reuters, 11/20). However, a Mercer survey released Wednesday found that although health care cost growth per worker slowed from 4.1% in 2012 to 2.1% in 2013, employers predict those costs will increase to 5.2% in 2014.

The survey polled 2,842 employers who currently offer health coverage to their employees. It found that costs per worker averaged around $10,779 in 2013 for both employer and employee contributions for medical, dental and other health coverage. Large employers saw overall cost increases of 3.7% in 2013, while small companies employing between 10 and 499 workers saw cost increases of 1%.

Some large companies said they have several strategies to handle the projected cost increases, such as discouraging enrollment in employer-offered health plans by raising employee premiums. Specifically:

• 18% of large companies said they would raise the amount employees pay to cover spouses and children; and
• 10% said they plan to increase costs for employee-only coverage.

Such increases will come on top of changes the companies already made in 2013, like promoting or requiring workers to get coverage through consumer-directed health plans, including health savings accounts and plans that only cover catastrophic health costs.

The survey also found that most small employers will continue to shift health care costs to their employees through higher-deductible health plans. According to the survey, average in-network deductible costs for individuals employed by small companies increased by 15% this year, reaching $1,663.

Mercer officials noted they were not sure how enrollment in the ACA's health insurance exchanges would affect the survey's cost projections (CQ HealthBeat, 11/20).