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Analysis

Medicare, Medicaid Enrollment Growing Faster Than Private Coverage

By Jack O'Brien  
   February 11, 2019

From 2006 to 2017, spending per enrollee for public programs has been lower than private coverage options even as enrollment grew substantially for both Medicaid and Medicare.

While enrollment in Medicaid and Medicare have grown in recent years, spending per enrollee has been effectively managed, especially compared to spending per enrollee under private coverage, according to a new Urban Institute study released Monday morning.

Over the course of 11 years, annual spending growth averaged 5.2% for Medicare and 6% for Medicaid. This eclipsed the 4.4% spending growth among private insurers. 

However, spending per enrollee from 2006 to 2017 was markedly lower for public programs compared to their private counterparts. Medicare spending per enrollee amounted to 2.4% per year, Medicaid registered at even lower 1.6%, while private insurance posted 4.4% annually. 

Medicaid and Medicare also achieved positive annual enrollment growth rates over the same period of time, 4.3% and 2.8% respectively, while private insurers finished with a flat enrollment growth rate. 

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The study's findings conclude that while CMS projects Medicaid and Medicare spending per enrollee to grow sizably over the next decade, both programs have "successfully moderated growth." 

The Urban Institute states that the results indicate that neither program require "major restructuring" to reduce national health spending and that the more concerning spending figures lie in the private insurance market.

The study's authors support "modest policy proposals," such as limiting state use of provider taxes in Medicaid or modifications to Medicare cost-sharing.

Both Medicare and Medicaid were praised in the report for contolling per capita health costs during a time of slowed national health expenditure growth, especially as questions regarding the fiscal sustainability of federal health programs have been raised.

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The study also found discrepencies between spending on prescription drugs, administrative costs, and hospital services in relation to spending among public and private health entities.  

Growth among spending for Medicare was primarily due to prescription drug spending, while administrative costs and physician services led the way for Medicaid. For private insurers, hospital services compromised most of the spending growth.

Jack O'Brien is the finance editor at HealthLeaders. 


KEY TAKEAWAYS

While Medicaid and Medicare grew their enrollment rolls, private coverage growth remained flat.

Even so, both public programs managed to keep their spending per enrollee well below that of private insurers.

The study's authors state that these findings do not support calls for major changes to the structure of federal health programs.


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