The Widespread Slowdown in Health Spending Growth Implications for Future Spending Projections and the Cost of the Affordable Care Act

The United States is on track to spend $2.6 trillion less on health care between 2014 and 2019, compared to initial projections made right after the 2010 passage of the Affordable Care Act (ACA).

The Issue 

The report uses health expenditure data produced by the Centers for Medicare and Medicaid Services and consistently adjusts in each year for the absence of the sustainable growth rate system for physician payment rates in Medicare.

Key Findings

  • The United States could spend $2.6 trillion less on health care between 2014 and 2019.

  • The authors note that despite signs of spiking health spending in 2014, there is evidence that spending growth has slowed down again.

Conclusion

The authors identify several possible causes in the projected drop in national health spending, including the effects of the Supreme Court’s ACA decisions and sequestration in the Budget Control Act of 2011, as well as the recession and the subsequent sluggish economic recovery.

About the Urban Institute

The nonprofit Urban Institute is dedicated to elevating the debate on social and economic policy. For nearly five decades, Urban scholars have conducted research and offered evidence-based solutions that improve lives and strengthen communities across a rapidly urbanizing world. Their objective research helps expand opportunities for all, reduce hardship among the most vulnerable and strengthen the effectiveness of the public sector. Visit the Urban Institute’s Health Policy Center for more information specific to its staff and its recent research.