United States to Spend $2.6 Trillion Less on Health

The United States is on track to spend $2.6 trillion less on healthcare between 2014 and 2019, compared to initial projections made right after the 2010 passage of the Affordable Care Act (ACA). This estimate is featured in a new report on national health expenditures, which is authored by experts at the Urban Institute with funding from the Robert Wood Johnson Foundation.

The report uses health expenditure data produced by the Centers for Medicare and Medicaid Services and consistently adjusts for the absence of the sustainable growth rate system for physician payment rates in Medicare, as noted by a press release from the Robert Wood Johnson Foundation.

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

“There are many potential drivers of the recent slowdown in spending growth rates, and no one can be sure how MACRA may impact spending going forward,” said Kathy Hempstead of the Robert Wood Johnson Foundation. “If this health care spending growth slowdown continues, spending will be trillions less before the end of the decade.”

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