Health care costs aren't rising as fast as anticipated
February 11, 2013
Last week, the Congressional Budget Office reported slower growth on health care spending than anticipated. Surprising news, considering CBO estimates from August regarding economic growth and federal spending on health care.
In December 2012, The Commonwealth Fund published a report stating that premiums for family coverage increased by 62% from 2003 to 2011, far faster than income for middle- and low-income families. Out-of-control costs, they assert, are a result of “poorly coordinated care, duplicative services, and administrative waste, as well as rising prices charged to those privately insured.”
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In August 2012, CBO’s projected growth of health-care spending from 2012-2022 was at 8.3% - that’s 3.5 percentage points faster than economic growth over the same period (4.8%). Since there has been slower growth in health-care costs, the February budget reports the new growth rate at 3% over the same period, which is a 16% drop.
The Economic Policy Institute reportsthat the slowdown from the March 2010 report to the current report lowers estimates of federal spending in 2020 for Medicare and Medicaid by $200 billion.
