Health spending rose 3.6 percent in 2013

U.S. health spending grew last year at its slowest rate since the government started keeping track in 1960, the Obama administration said Wednesday.

The Centers for Medicare and Medicaid Services (CMS) said spending grew by 3.6 percent in 2013 to reach $2.9 trillion, or $9,255 per person — a reflection of the post-recession economy, although officials hope reforms spurred by Obamacare produce a long-lasting trend.

“To keep this momentum going, we are continuing our efforts to shift toward paying for care in ways that reward providers who achieve better outcomes and lower costs,” CMS Administrator Marilyn Tavenner said.

The new figures reflect a five-year period of historically low growth in health spending that’s ranged from 3.6 percent to 4.1 percent per year, government actuaries said.

Health spending’s share of the economy has been pegged at 17.4 percent since 2009, as modest rises in health spending track with limited growth in GDP, the new study said.

The 2013 rate marked a slowdown of 0.5 percent from the 4.1 percent growth seen in 2012. Researchers attributed the change to decreased use of private health insurance and Medicare and fewer investments in medical structures and equipment. An uptick in Medicaid spending offset the slowdown to a degree.

Actuaries said the second-lowest rate of growth recorded over the last half-century occurred in 2009, at 3.8 percent. The U.S. economy shrank by nearly 3 percent that year in the worst year of the Great Recession.

Whether health spending rebounds with the economy, or if Obamacare reforms and other quality measures produce a lasting trend, remains to be seen.

The Affordable Care Act included cuts to Medicare and penalized hospitals for high re-admission rates for patients, two changes that kept health spending in check.

“The key question is whether health spending growth will accelerate once economic conditions improve significantly; historical evidence suggests that it will,” actuaries wrote in Health Affairs, which first published Wednesday’s figures. “However, in the near term, the health sector will undergo major changes that will have a substantial impact on the consumers, providers, insurers and sponsors of health care.”

Officials noted that the major provisions of Obamacare did not take effect until 2014, so the overhaul’s impact will be better reflected in next year’s report.

Roughly half the states opted to expand Medicaid, while millions are expected to retain or purchase private plans on state-based health exchanges.

About 765,000 people have chosen a private health plan on the federal Obamacare marketplace since the second year of enrollment began on Nov. 15, the Health and Human Services Department reported Wednesday.

Roughly half of the customers shopped on the exchange known as HealthCare.gov for the first time, while the others are returning customers who selected a plan last year and have re-enrolled or shopped for a new plan.

The administration is releasing weekly “snapshots” on federal exchange usage in addition to its official monthly enrollment reports.

Earlier this year, the administration estimated that roughly 9.1 million people would hold coverage from a federal or state-run Obamacare exchange in 2015 — far short of Congressional Budget Office estimates of 13 million.