Health care spending stabilized, Obamacare’s impact waned, say federal actuaries
Health care spending stabilized during President Trump’s first year in office, as patients used fewer services, Obamacare’s impact waned and patients no longer needed pricey hepatitis C drugs, federal actuaries said Thursday.
Consumers also found more low-cost generics at the pharmacy counter, while fewer pain medicines flew off the shelves, as policymakers started to get a handle on the addiction crisis, according to the Centers for Medicare and Medicaid Services.
National health spending grew at a rate of 3.9 percent in 2017, nearly a full percentage point slower than in the previous year.
To be sure, health spending in raw dollars continues to climb. It inched up to $3.5 trillion last year, or about $10,700 per person.
Yet the rate of growth, which continues a slowdown that began in 2016, aligned closely with economic growth, meaning health spending’s share of the gross domestic product remained static at about 18 percent.
“This was the first year since 2013 that this share did not increase,” CMS wrote in Health Affairs, which published the report.
Actuaries said they don’t know if a slowdown in the use of hospitals, doctor’s services and retail drugs was attributable to a healthier population, though they pointed to a few trends that may explain the slower growth in expenditures.
Hepatitis C sufferers who snapped up pricey, brand-name drugs at mid-decade have been cured and no longer need the therapies. The medicines, which can cost $1,000 per pill, made a big splash when they entered the market and fueled the debate over high-cost drugs.
Americans also are spending less on pain medication, since doctors are being more cautious about prescribing the addictive pills.
“A lot of that did have to do with the opioid epidemic and greater tightening of those types of prescriptions being dispensed,” said Anne Martin, a CMS actuary and lead author of the report.
The opioid prescribing rate fell to its lowest rate in more than 10 years in 2017, at 58.7 prescriptions per 100 persons, according to the Centers for Disease Control and Prevention.
Slower growth in health insurance enrollment is likely holding back spending, too. The share of insured persons in the U.S. dipped slightly, from 91.1 percent to 90.9 percent, from 2016 to 2017, the report said.
Interest in Obamacare plans on the exchanges slipped, and the direct purchase of insurance outside of the law’s exchanges fell in the face of soaring premiums that unsubsidized customers couldn’t afford.
Meanwhile, the vast expansion of Medicaid insurance for the poor stalled out in the states by 2017, when Republicans took control of both Congress and the White House on a pledge to undo the program.
Those efforts fell apart, however, renewing interest in Medicaid expansion that may be reflected in future cost reports.
Virginia is implementing its expansion now, while Maine and three conservative-leaning states that approved expansion via the ballot box are poised to expand their rolls next year.
What did change in CMS’ report, however, is the share of costs borne by states. The federal government paid the full cost of the Medicaid-expansion population until 2017, when states had to start paying 5 percent of the costs a share that will increase to 10 percent starting in 2020.
CMS’ report says state and local spending on Medicaid grew by 6.4 percent in 2017, while federal expenditures grew just 0.8 percent.
Spending on Medicare, the program for seniors that accounts for one-fifth of health spending, grew by slightly more than 4 percent about the same rate as in 2016.