According to a recent study conducted by analysts at the Department of Health and Human Services (HHS), health spending in the U.S. grew in 2013 at the slowest rate ever recorded. Total spending on healthcare increased by just 3.6% last year to $2.9 trillion. In comparison, healthcare spending in 2012 increased by 4.1% and health spending increased by nearly 10% back in 2002.
Reasons for the Slowdown in Spending
According to statisticians and economists who worked on the HHS study, the slowdown in healthcare spending was largely the result of sluggish economic growth. The recovery from the “Great Recession” that ended in 2009 has been relatively weak. A partial result has been modest increases in health spending. The study’s analysts also contribute changes in the nation’s healthcare system to the spending slowdown.
Are there Benefits to the Slowdown?
The quick answer is perhaps. Authors of the HHS study point to two possible benefits. First, slowdowns in health spending have meant slower growth in the Medicare program. This translates into relieved pressure on the federal budget.
Second, a reduction in spending has apparently eased the increase of premiums for commercial health insurance plans. This so-called benefit, however, poses a problem. Lower premiums have partly caused an explosion in high-deductible health plans. Higher deductibles mean millions of Americans potentially face high out-of-pocket medical expenses. This could lead to a decrease in overall health in the U.S. if citizens put off needed medical care to save money.
What does the Future Hold?
There doesn’t seem to be a magical crystal ball on the issue. Analysts are somewhat unclear as to whether the slowdown will continue. There does seem to be a large consensus, however, that wants to believe 2014 will experience higher increases in health spending. To support this belief, many quickly point to the greater number of Americans that have gained coverage this year through the federal health law.
For the time being, it looks like all of us will have to see what the future holds. Phillips Law Firm will continue to monitor the issue and will provide updates as soon as they develop. In the meantime, please do not hesitate to contact us if you have any questions.