Health Care’s New Trend: Spending Dollars More Wisely

By Kathleen Sebelius, Secretary of Health and Human Services
Posted June 12, 2012

Today, a new report from the Centers for Medicare & Medicaid Services included good news for consumers and our health care system. This report provides more evidence that the health care law will help control costs and save money for families while extending coverage to millions of Americans. According to the new report:

  • Health care costs stay steady. Contrary to claims made by opponents of the health care law, today’s report found that the Affordable Care Act did not result in increased health care costs. In fact, the report showed a slight decrease in costs in 2011.
  • Consumers will save money. Out-of-pocket spending will decrease by 1.5% as provisions of the Affordable Care Act – the health care law – kick in. In the short run, consumers won’t see the kind of price hikes on prescription drugs they have become accustomed to in recent years. The report finds that growth in prescription drug spending will decline from 3.9% in 2011 to 2.9% in 2012 and to 2.4% in 2013. That’s real money back in the pockets of millions of Americans.
  • No increase in national health spending as a percent of GDP for five years. From 2009 through 2013, national health spending will not increase as a percent of the economy.
  • Slower growth in health care spending once changes are implemented. The Affordable Care Act is projected to insure over 30 million additional Americans, resulting in improved access and thus health spending as they gain coverage.  Once implemented, the report shows that national health spending growth is projected to be lower than it would have been without the health care law from 2017 through 2019.

This report is consistent with other recent reports, one of which stated: “Four years of historically low growth is noteworthy and we may be at the start of a new normal.”  

The health care law has contributed to these results and will continue to help move us forward.  We’re rooting out fraud and abuse, and have stopped people across the country who are scamming the Medicare system.  Medicare is making cutting-edge payment reforms, such as demonstrations launched by the CMS Innovation Center that will test models that save money and improve care, and help ensure that these models are replicated across the country.  We have implemented policies to hold insurance companies accountable.  And, we’re investing in primary care and prevention that will help keep small health problems from turning into big ones.

Thanks to reforms like these, the Affordable Care Act is helping control health costs and expand coverage, and ensure better health and better health care, for all Americans in the next decade and well beyond.