Study: Post-ACA healthcare spending could fall $2.6 trillion below projections

The U.S. is on pace to spend about $2.6 trillion less on healthcare between 2014 and 2019 than what was originally forecast by CMS in 2010 after the Affordable Care Act was signed into law, according to a new study by the Urban Institute and funded by the Robert Wood Johnson Foundation (RWJF).

It’s a dramatic shift from the overall projections, which estimated healthcare spending would increase by $577 million between 2014 and 2019, largely due to the increased costs of expanding health coverage.

While some of the reduction could be attributed to certain policies, such as the 2012 Supreme Court decision saying states couldn’t be required to expand Medicaid or budget sequestration, the study largely credits a “historic slowdown” in healthcare spending growth.

“There are many potential drivers of the recent slowdown in spending growth rates, and no one can be sure how MACRA may impact spending going forward,” Kathy Hempstead, PhD, senior adviser to the vice president of the Robert Wood Johnson Foundation, said in a statement. “If this healthcare spending growth slowdown continues, spending will be trillions less before the end of the decade.”

The lion’s share of the reductions in the new forecast would come from Medicaid spending, which is projected to be $1 trillion less than what was estimated in 2010, likely due to some states not expanding eligibility.

Medicare spending is projected to drop by $455 billion in the 2015 projection, which incorporates the 2015 Medicare Access and CHIP Reauthorization Act (MACRA) and the end of the sustainable growth rate formula.