Health Affairs: Healthcare share of GDP to reach 19.6% in 2019
 |
The article presents an update to the 2009-2019 national health spending projections by payor, which were published in February. Lead author Andrea M. Sisko, economist in the Office of the Actuary at CMS, and colleagues stated the net impacts of key PPACA and other legislative provisions on total national health expenditures would be moderate, but the underlying effects on payor spending levels and growth rates are much more pronounced and reflect the PPACA’s many substantive changes to healthcare coverage and financing.
Largely as a result of Medicaid coverage expansion, growth in national health spending is projected to be 9.2 percent in 2014. For 2015 to 2019, national health spending is projected to increase 6.7 percent per year on average.
“As the provisions are implemented over time, their actual impacts may well differ considerably from these estimates,” wrote the authors.
For 2011, national health spending is projected to grow more slowly, at 4.2 percent; a pattern of growth is largely attributed to modification to the Medicare sustainable growth rate system, which determines Medicare payments for physician services.
Immediate reforms in the PPACA also are estimated to affect health spending during 2010 to 2013, including the implementation of the Pre-Existing Condition Insurance Plan, or high-risk insurance pools for those with health conditions that make it difficult to acquire affordable individually-purchased coverage.
“Enrollment in the program is expected to peak at about 375,000 people covered in 2011,” the researchers stated. “Also affecting health spending is the PPACA provision for coverage of dependents under age 26, which is expected to peak at about 1.5 million people covered in 2013. In total, these provisions are estimated to increase national health spending by $10.2 billion through 2013.”
In 2009 and 2010, private health insurance spending growth is expected to be between 3.5 percent and 4.3 percent, respectively. This acceleration in growth from 2009 to 2010 is attributable to changes in the law that extended eligibility for Consolidated Omnibus Budget Reconciliation Act (COBRA) premium subsidies to May 31 and increased the duration of eligibility for the subsidies from nine months to 15 months, according to the authors. “These COBRA-related changes are estimated to have resulted in an additional 1.6 million insured people and an additional $15.4 billion in private health insurance spending in 2010.”
Private health insurance spending is anticipated to grow 2.2 percent in 2011, the researchers stated. Private health insurance spending growth for 2014 is expected to be 12.8 percent. During 2014, it is estimated that 15.8 million people will obtain private health insurance coverage through exchange plans. Overall, private health insurance spending is anticipated to account for about 32 percent of national health expenditures in 2019 after the effects of the PPACA.
In 2010, growth in consumers’ out-of-pocket spending is expected to be 1.9 percent. In 2014, the number of uninsured people is expected to fall dramatically, as many are expected to acquire health insurance coverage either through Medicaid or through exchange plans. As a result, out-of-pocket spending is expected to decline by 1.1 percent.
"By 2018, we project out-of-pocket spending growth of 9.6 percent," the authors wrote. "This is mainly attributable to the excise tax on high-cost employer-sponsored plans, which is expected to result in greater cost sharing as many affected employers scale back coverage to minimize their tax exposure."
“Many important details of the legislation will evolve through regulatory activity and become more concrete,” the researchers concluded. “When we release our next set of national health spending projections in early 2011, we will shift the analysis an additional year into the future, examine spending by service and continue the work of estimating the impact of reform on overall national health spending.”