With a rebounding economy and more Americans gaining health care coverage under Obamacare, health care spending in the U.S is anticipated to grow in the coming years, a new government report reveals, albeit the increase would be modest and may not yet immediately return to pre-recession growth rates.
In its report published in the journal Health Affairs on Sept. 3, the Centers for Medicare and Medicaid Services (CMS) said that the average annual healthcare spending in the U.S. is expected to grow by 5.7 percent between the years 2013 and 2023, which is slightly lower compared with the 5.8 percent projection from last year that covered the period between 2012 and 2022. The figure is also way below the 7.2 percent annual increase from 1990 through 2008.
"We are not projecting that growth will get back to its rapid pace of the '80s and '90s," Sean Keehan, an economist from the CMS Office of the Actuary in Baltimore, Maryland told the Associated Press.
Keehan and colleagues, who prepared the report, said that the health spending growth for 2013 was anticipated to have remained sluggish at 3.6 percent because of the economy's slow recovery and continued increase in cost-sharing requirements in private health insurance.
Keehan said that the rising cost-sharing contributes to slow growth because when people use their own money for their health care instead of that of their insurers and employers, they tend to opt for fewer procedures.
The expanded insurance coverage brought about by the Affordable Care Act, faster economic growth and the aging population, however, apparently bring a positive impact on healthcare spending as these are expected to drive health care spending starting 2014 and thereafter until 2023.
"The combined effects of the Affordable Care Act's coverage expansions, faster economic growth, and population aging are expected to fuel health spending growth this year and thereafter (5.6 percent in 2014 and 6.0 percent per year for 2015-23)," says the CMS report.
The CMS report stated that the number of uninsured will more likely drop by almost half. From 45 million in 2012, the number of Americans who will likely have insurance coverage by 2023 will be 23 million and this increase is attributed to coverage expansions associated with President Barack Obama's health insurance reform law.
The CMS actuary expects that health spending will increase to 5.6 percent in 2015 but this will slow down to 4.9 percent in 2015 largely because of payment reductions by Medicare Advantage and Medicaid. The spending growth, however, is anticipated to pick up again by 6.1 percent annually from 2016 to 2023.