Health spending projections from the CMS

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Yesterday, Health Affairs released the annual projections of national health expenditures (NHE) from the Office of the Actuary at the Center for Medicare and Medicaid Services (CMS). In conjunction with the release of the new projections, Health Affairs asked the lead CMS author, Gigi Cuckler, to provide an overview of the new forecast in a “Health Affairs Conversations” podcast. The journal also asked Princeton University economist Uwe Reinhardt and I to provide some commentary about the CMS projections following Ms. Cuckler’s remarks.

An important takeaway from these new projections is that the CMS Office of the Actuary finds no evidence to link the 2010 health care law to the recent slowdown in health care cost escalation. Indeed, the authors of the projections make it clear that the slowdown is not out of line with the historical link between health spending growth and economic conditions.

Furthermore, to the extent anything fundamental has changed in health care over the last decade, the most likely source of the shift is the steady movement toward higher deductible and consumer-driven health insurance. The authors of the projections note this trend as an important development in employer-sponsored health care.

The entire podcast (about fifty minutes) is available here.

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James C.
Capretta
  • James Capretta has spent more than two decades studying American health care policy. As an associate director at the White House's Office of Management and Budget from 2001 to 2004, he was responsible for all health care, Social Security and welfare issues. Earlier, he served as a senior health policy analyst at the U.S. Senate Budget Committee and at the U.S. House Committee on Ways and Means. Capretta is also concurrently a Senior Fellow at the Ethics and Public Policy Center. At AEI, he will be researching how to replace the Patient Protection and Affordable Care Act (best known as Obamacare) with a less expensive reform plan to provide effective and secure health insurance for working-age Americans and their families.

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