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<p>The Widespread Slowdown
in Health Spending Growth
Implications for Future
Spending Projections and the
Cost of the Affordable Care Act
An Update
ACA Implementation—Monitoring and Tracking
June 2016
Stacey McMorrow and John Holahan
2
ACA Implemention-Monitoring and Tracking
INTRODUCTION
In April 2015, we published a report that analyzed the
widespread slowdown in health care spending growth
leading up to 2014 and the implications for national health
expenditure projections and the cost of the Affordable
Care Act (ACA).1 We examined six consecutive Centers for
Medicare and Medicaid Services (CMS) forecasts of national
health expenditures, focusing on the pre-ACA forecast
made in February 2010, the ACA baseline forecast made
in September 2010, and the 2014 forecast.2 In 2010, CMS
estimated that national health expenditures for the years
2014 to 2019 would increase by $577 billion under the ACA.
This reflected the increased costs of coverage expansion
offset by reductions in Medicare and Medicaid payments.
Over the next four years, however, CMS repeatedly
reduced its annual forecasts of 2014 to 2019 expenditures.
Ultimately, the 2014 forecast suggested that national health
expenditures for 2014 to 2019 would be about $2.5 trillion
less than the ACA baseline forecast from September 2010.
Projections were lower overall and for Medicare, Medicaid,
and private health insurance, with some of the reductions
explained by policy changes over time, such as the 2012
Supreme Court decision on Medicaid expansion and the
Budget Control Act of 2011 (i.e., sequestration).
A critical factor in the reduced spending projections
over time, however, was the historic slowdown in health
spending growth that began in 2008. At the time of the
2014 forecast, the average annual growth rate from 2010
to 2013 was about 3.6 percent compared with the 5.4
percent that had been projected in 2010. This slower
growth clearly lowered the level of spending on which
later forecasts were based and therefore contributed