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Health Care Spending Growth and Federal Policy

Publication Date
Mar 21, 2016

In this Issue Brief, we examine spending growth through 2014, the first year the Affordable Care Act’s coverage provisions were in effect, and 2015, where possible. We provide detailed cost growth trends for Medicare and the private insurance market. We also estimate the effect of recently introduced specialty drugs on current and future spending growth. We find that during the initial two years of implementing the ACA’s major insurance coverage expansion provisions, growth in national health expenditures remained modest, especially when considered on a per person basis within payer categories. Current trends suggest that this increase in spending may well be transitory. An important secondary contributor to spending growth has been the introduction of new specialty drugs, some demonstrating significant improvements in treatment outcomes. It will likely take several more years to fully understand how changes in the prescription drug market will affect spending growth in that sector and more broadly.