Center for American Progress

STATEMENT: CAP’s Topher Spiro on Record Slow Growth in Health Care Costs
Press Statement

STATEMENT: CAP’s Topher Spiro on Record Slow Growth in Health Care Costs

Washington D.C. — Topher Spiro, Managing Director for Health Policy at the Center for American Progress, issued the following statement today regarding the national health care expenditure figures released by the Centers for Medicare and Medicaid Services:

The recession undoubtedly had a major impact on private insurance coverage and consumption, but the actions of the Obama administration also contributed to the record slow growth in health care spending revealed by today’s new data. In 2010, growth in Medicare spending slowed significantly due to cuts in payments to private health plans. Over the next few years, the Affordable Care Act will also cut inefficient subsidies to these plans, slowing Medicare growth even more. Furthermore, the Affordable Care Act contributed to a dramatic slowdown in Medicaid spending on prescription drugs by increasing the rebates that drug manufacturers must pay. Finally, the administration’s crackdown on fraudulent billing resulted in a significant reduction in Medicare spending on home health care.

The data released today also show that Medicare is more effective at containing costs than private health plans—it continues to have a lower growth in costs per enrollee. The data should give pause to anyone who thinks that giving vouchers to seniors to buy private plans is a good idea. The data also show why the Affordable Care Act is so vital. The administrative costs and profits of health insurance companies grew at 8.4 percent in 2010—the fastest growing spending category. But starting in 2011, the Affordable Care Act required public review of unreasonable premium increases and put limits on insurance company administrative costs and profits.

To speak with an expert on this topic, contact Katie Peters at [email protected] or 202.741.6285.