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February 12, 2016

Health Spending Lull Projected to End

On Wednesday, federal actuaries released projections that health care spending will rise 5.6 percent this year to $3.06 trillion. CQ HealthBeat’s Kerry Young reported that the new estimate is the first time in six years that the health care spending growth rate has topped 4 percent.  One of the primary objectives of the 2010 health care overhaul law was to slow the growth of medical costs. Since 2010, the growth rate has slowed and the 2013 rate is estimated at 3.6 percent. CMS researchers cited three factors behind the projected increase starting in 2014: More people are expected to gain access to health coverage under the law; the economy will strengthen; and the U.S. population, particularly baby boomers, will age and thus need more medical services.

The report also notes that, while health spending is set to grow faster than it has in recent years, it still may rise more slowly than it did in the years before the health law took effect. The average growth rate for national health expenses was 7.2 percent in the period of 1990 to 2008, but could be 6 percent in the period of 2015 to 2023.

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