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CMS Report Fuels Still-Volatile Reform Debate CMS Report Fuels Still-Volatile Reform Debate

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CMS Report Fuels Still-Volatile Reform Debate

Democrats on Capitol Hill and in the White House today quietly lauded a report that shows moderate growth in overall health expenditures under a fully reformed healthcare system despite claims by their Republican critics that the overhaul package did little to rein in ever-rising costs.

The comments from both sides hint strongly that the volatility that surfaced during the year-and-a-half long reform debate still exists even as the battleground shifts from the Capitol Hill to the airwaves and, soon, to the ballot box.


"One of the key points when they sold this plan was that it was going to bend the cost curve, slow the growth and cut costs," said one Senate Republican aide. "They led people to believe that they're plan would cut costs. That was an absolute essential part of their sales pitch."

The report, drafted by federal actuaries at the Centers for Medicare and Medicaid Services, projects the nation's overall healthcare tab will reach $4.5 trillion 10 years out, under the provisions inherent in the reform package.

Conversely, had the legislative package failed, expenditures would be slightly lower, roughly $4.4 trillion. Currently, CMS expects healthcare expenditures to reach $2.6 trillion this year.


CMS actuaries predict that the rate of growth in spending on health will increase to 6.3 percent over the full 10-year implementation window versus 6.1 percent if the bill had not been signed into law.

The data compares overall spending under the new law against projections made as if it had never been enacted. The estimates track surprisingly close.

But a departure occurs in 2014, the first year widely expanded coverage options are created through the exchange. Here, CMS projects a much greater growth rate and a higher level of health spending, roughly 9.2 percent under the reform package versus 6.6 percent without the law.

The one-time bump turns downward in trajectory in the following years, however. From 2014 to 2019, spending growth is actually lower under the reform law, 6.7 percent, than it would be without it, 6.8 percent.


The numbers, published in the journal Health Affairs, are part of a second-take look at the effect the mammoth reform package could have on the nation's healthcare system. It serves as an update to a report released by CMS in February that did not take into account the final reform package.

While closely watched among health policy circles, the annual report is often met with caveats and skepticism from those wary of making projections for a part of the U.S. economy that has proven so hard to predict. What is more, whenever healthcare costs are tallied over a long stretch, it is rarely a question of "if" they increase, but rather by "how much and how quickly."

"If you look at how many more people we're covering - we're covering over 30 million more people - of course there is going to be more spending," said a Democratic House aide who works on healthcare issues. "The fact that there's just a small uptick shows we're getting a lot bigger bang for our buck."

The report estimates that 32.5 million more Americans will gain health coverage because of the health law, although more than half of them will enroll in government programs.

"To bring that number of people into the system and have costs and spending not go up by that much, I think that's really good news," said Paul Ginsburg, president of the Center for Studying Health System Change.

In a blog post filed on the White House's website, Nancy-Ann DeParle, director of the White House Office of Health Reform, cited projections on how the law would affect everyday Americans.

Total healthcare spending per insured American will be more than $1,000 lower than if the giant reform package had flat-lined on Capitol Hill, the report states. "This is great news for many Americans," DeParle wrote, adding, "More good news for American consumers."

Still, Republican leadership aides said that even the slightest projected increase in cost and spending illustrates a steep departure over how the White House framed its reform message versus projections that have since emerged.

"The bottom line is, they absolutely led people to believe that this plan would cut healthcare costs," a Senate GOP aide said. "The Republicans said that's not true. And frankly, the people who watched the debate were skeptical, too."

Douglas Holtz-Eakin, president of Operation Healthcare Choice at the American Action Forum and a critic of the new law, agreed.

"What jumps out is that health care spending goes up, not down," he said. "And that's a serious indictment of where we ended up."

[Updated Sept. 10, 2010]

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