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CMS: Healthcare Spending to Increase Over Next Decade

Janice Simmons, for HealthLeaders Media, September 9, 2010

For 2010, healthcare spending is projected to reach $2.6 trillion, accounting for 17.5% of the GDP, up 0.2 percentage point from pre-reform estimates. The economists attribute this growth in large part to postponement of cuts to Medicare physician payments and legislative changes to COBRA premium subsidies.

By 2011, though, public and private health spending is expected to grow more slowly if reductions in the Medicare physician payment rate go into effect—especially the 23% reduction that starts in December 2010 and the expiration of COBRA premium subsidies begins.

Among other CMS projections are:

  • From 2015-2019, national health expenditures are projected to grow at an average annual rate of 6.7%, slightly less than the pre-reform projection of 6.8%. This reduction in Medicare spending growth is projected to be 1.4% lower than pre-reform estimates.
  • The new administrative function for health reform at HHS is projected to cost $2.4 billion between 2010-2019. Health insurance exchanges are projected to cost $37.7 billion.
  • Nearly 93% of people will be insured by 2019—a level nearly 10% higher than the share of the population that was expected to be insured without the passage of healthcare reform.
  • Enrollment in Medicaid and the Children's Health Insurance Program is projected to increase by 21.8 million in 2014 to 85.2 million people.

Janice Simmons is a senior editor and Washington, DC, correspondent for HealthLeaders Media Online. She can be reached at jsimmons@healthleadersmedia.com.

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