Today, the CMS Office of the Actuary released its report on how much the United States spends on health care now and in the future. The report shows a 3.9 percent growth in health spending in 2010 – an historic low. Overall Medicare cost growth dropped from 7.9 to 4.5 percent between 2009 and 2010. This slow-down occurred at the same time that many seniors with Medicare received cheaper prescription drugs. According to the report, private health spending has and will continue to be low in the next few years. And the report estimates that private benefit spending growth per enrollee will be 3 percent this year, rather than 4.7 percent thanks in part to the Affordable Care Act’s policy that allows young adults to stay on their parent’s plan.
The report concludes that:
Average annual growth in national health spending is expected to be 0.1 percentage point higher (5.8 percent) under current law compared to projected average growth prior to the passage of the Affordable Care Act (5.7 percent) for 2010 through 2020. Simultaneously, by 2020, thirty million Americans are expected to gain health insurance coverage as a result of the Affordable Care Act.
The bottom line from the report is clear: more Americans will get coverage and save money and health expenditure growth will remain virtually the same. But the report doesn’t tell the whole story.
The Affordable Care Act creates changes to the health care system that typically don’t show up on an accounting table. We know these new provisions will save money for the health care system, even if today’s report doesn’t credit these strategies with reducing costs. These provisions include:
Americans know that these common-sense strategies will reduce health care costs. Preventing disease and illness before it happens can keep people out of the hospital or the doctor’s office in the first place. Making health care more efficient improves the quality of care and saves money. And investing in new innovations can help generate new ideas and new delivery system reforms that reduce costs. Further, these provisions of the law represent ideas that hospitals, doctors, and employers all over America have been putting into practice for years, where they’ve been able to increase the quality of health care and reduce costs.
We are confident that these reforms – in addition to those in the law – will help make our health care system more efficient, provide better health care to millions of Americans, and bring down health care costs for all of us.
Nancy-Ann DeParle is White House Deputy Chief of Staff