CMS Report Outlines State Health Spending

Medicaid expansion states show slower growth in health expenditures.

The Centers for Medicare & Medicaid Services (CMS) Office of the Actuary (OACT) recently released healthcare spending data from 1991 to 2014 on a state-level.

The report indicated that while most states had faster growth in 2014 due to the Affordable Care Act (ACA), per capita health spending in Medicaid expansion states and non-expansion states was similar, according to a press release.

The CMS also found that the economic recession and modest recovery time had an impact on healthcare spending and insurance coverage. Each state was found to have slower growth in healthcare spending from 2010 to 2013 compared with 2004 to 2009.

The report contains crucial context for understanding how healthcare spending varies among different states, according to the CMS. The new analysis examines personal healthcare spending, which is presented by type of goods and services and by payers for state residents.

In 2014, total per capita health expenditures in New England and the Mideast outpaced the national average. During this time, the average spending in New England was $10,199 and $9370 in the Mideast, while the national average was $8045, according to the study.

The CMS also found that the Rocky Mountain and Southwest regions had the lowest spending. In 2014, these regions spent $6814 and $6978 on personal healthcare expenditures, respectively, an average of 15% less than the national average.

During the implementation of ACA marketplaces and Medicaid expansion, spending in expansion states grew at 4.4%, while spending in non-expansion states grew by 4.5%.

The similar growth in spending was due to faster utilization of healthcare goods and services in expansion states and faster spending in per insured person in non-expansion states, according to the study.

The CMS reported that the most recent recession, which ended in 2009, resulted in slower healthcare spending. From 2010 to 2013, spending grew at a rate of 2.8% per year, which was slower than the 5.2% rate from 2004 to 2009.

For Medicare, states with above average spending were located in the eastern region, while lower spending was centralized to the west. In 2014, New Jersey accounted for the highest per enrollee spending at $12,614, which was 15% above the national average of $10,986, according to the study.

Montana accounted for the lowest per enrollee spending for Medicare, at $8328, which was 25% below the national average.

Trends in Medicaid spending during this period were largely driven by expansion of the program under the ACA. From 2013 to 2014, total Medicaid spending increased 12.3% compared with only 6.2% in non-expansion states, according to the study.

Interestingly, Medicaid spending declined 5.1% for expansion states in 2014 compared with a 5.1% increase for non-expansion states. The CMS reports that this trend is due to the enrollment of new enrollees who were relatively less expensive.

The authors also discovered that per enrollee health insurance spending increased from $3872 in 2009 to $4551 in 2014, an average increase of 3.3%.

Total private health insurance expenditures were found to grow at a rate of 6.8% in non-expansion states by 2014, while spending increased 4.6% in expansion states, according to the study. The CMS stated that this difference was influenced by larger enrollment in private health insurance in non-expansion states.

“Recent economic and health sector factors have had clear impacts by state, both by payer and in the rates of overall per capita personal health care expenditure growth; however, during the 2009 to 2014 period, the variation in spending between the lowest and highest states was virtually unchanged,” said lead study author David Lassman.