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Healthcare Spending Growth Hits 53-Year Low

John Commins, for HealthLeaders Media, January 7, 2014

Total private health insurance premiums reached $917.0 billion in 2012. For medical benefits, per enrollee spending accelerated slightly, from 2.9% growth in 2011 to 3.2% in 2012, both near historic lows, and was primarily due to increased growth in spending for hospital care and for physician and clinical services.

Medicare spending (4.8%)
Growth slowed slightly (compared to 5% growth in 2011) to reach $572.5 billion in 2012. Growth in fee-for-service expenditures, which accounted for nearly three-quarters of total Medicare spending, slowed from 4.3% in 2011 to 2.7% in 2012. Medicare Advantage spending accounted for the remainder, increasing 10.9% in 2012 (compared to 7% in 2011).

Total enrollment in Medicare for all beneficiaries jumped 4.1% in 2012--the largest one-year increase in 39 years, as the oldest members of the baby boom generation became eligible to enroll in Medicare in 2011. Slower growth in total Medicare spending in 2012 was primarily due to a one-time payment reduction for skilled nursing facilities.


John Commins is a senior editor with HealthLeaders Media.

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