Number of Insured Expected to Increase With Rapid Health Spending Growth

Centers for Medicare & Medicaid Services report projects health expenditures to grow at an average annual rate of 5.7% through 2023.

Centers for Medicare & Medicaid Services report projects health expenditures to grow at an average annual rate of 5.7% through 2023.

As a result of the Affordable Care Act (ACA), the number of uninsured people in the United States is forecast to drop from 45 million in 2012 to 23 million by 2023, according to a report from the Centers for Medicare & Medicaid Services (CMS) Office of the Actuary.

Health care spending growth is expected to remain sluggish in 2013 at a rate of 3.6%, which is the fifth straight year of spending growth under a rate of 4%. But national health expenditures are forecast to grow at an average rate of 5.7% through 2023, which is approximately 1 percentage point faster than the average annual growth rate anticipated for the Gross Domestic Product (GDP).

“Health care costs are increasing at a slower rate thanks to the Affordable Care Act,” said Marilyn Tavenner, CMS administrator in a press release. “The dramatic decrease in the number of uninsured Americans is a win for our country and its economy in the future.”

The report also projects an average annual growth rate of 6% per year from 2015 through 2023, as a result of expanded coverage through the ACA, in addition to rapid economic growth and an aging population. This anticipated growth over the projection period is faster than what was experienced in recent years, but is still slower than the growth that occurred over the last two decades.

From 1990 through 2008, the average growth rate was 7.2%, while health spending grew 2 percentage points faster than the GDP, the report stated.

The growth rate of health care spending for this year is expected to be 5.6%, with 9 million Americans projected to obtain health insurance through Medicaid or the health insurance marketplaces. CMS projects out-of-pocket spending to decline by 0.2% in 2014.

Health expenses financed by federal, state, and local governments are projected to account for 48% of national health spending by 2023. In 2012, these expenditures represented 44% of national health spending.

The Catamaran Corporation recently projected specialty medications to account for approximately 40% of all pharmacy spending by 2016, as US spending on prescription drugs is estimated to increase in the retail space by $227 billion between 2010 and 2020.

Last year, the average cost of a specialty prescription grew 17% to $2860 as a result of increased utilization and more expensive products, according to the report. For 2014 alone, Catamaran projects prescription drug spending to grow by 5.2%, which is approximately 2.9% greater than what the estimated growth would be if not for the ACA.