| WASHINGTON, Sept 3
WASHINGTON, Sept 3 U.S. healthcare spending is
expected to grow more slowly in the coming decade as a sluggish
economic recovery and higher cost sharing in private insurance
plans limit demand for services, a government report released on
The Centers for Medicare and Medicaid said it expects
average annual healthcare spending to grow by 5.7 percent from
2013 to 2023, compared to 5.8 percent in last year's
projections, which covered the years 2012 to 2022.
The projected growth rate is well below the 7.2 percent
annual average between 1990 and 2008, CMS said.
The projections coincide with Congressional Budget Office
estimates released last week that show another $11 billion
reduction in projected spending for Medicare, the federal
healthcare program for the elderly, for the 2015-24 period. This
reduction from projections made in February contributes directly
to lower federal deficits.
The CMS study projects both public and private healthcare
outlays and showed the overall total will make up a smaller
portion of the economy than previously thought in coming years.
In 2023, it estimated that healthcare spending will equal 19.3
percent of Gross Domestic Product, compared with last year's
projection of 19.9 percent for 2022. It made up 17.2 percent of
GDP in 2012.
The spending growth rate for 2013 will be 3.6 percent,
nearly at the historic low since CMS started tracking health
care spending in 1960.
For 2014, the spending growth will accelerate to 5.6 percent
as more people gain healthcare coverage under President Barack
Obama's health insurance reform law, largely through its
expansion of Medicaid, and because of an increase in economic
growth. But this will still be below last year's estimate of 6.1
percent growth for 2014.
"The major factor is the relationship between health
spending and economic growth," said Andrea Sisko, an economist
in the CMS actuarial division.
Loss of jobs and associated healthcare benefits tend to
discourage healthcare utilization, she said, adding that
employment has been slow to recover. Another deterrent has been
the increase in healthcare plans that require beneficiaries to
bear a greater proportion of costs for doctor visits, procedures
and prescription drugs.
Medicare reimbursement rates also have been curtailed by the
"sequester" budget cuts and by the Affordable Care Act, and
prescription drug costs have eased because patents on a number
of major medications have expired in recent years, making
cheaper generic versions available.
But as the economy improves and more Baby Boomers retire and
draw benefits, spending growth is still expected to pick up,
averaging 6.0 percent from 2015-23, CMS said.
(Reporting by David Lawder; Editing by Bernard Orr)