Health insurers have benefited greatly from the recent trend of decreased utilization--the 3.9 percent growth in health spending in 2010 was the lowest ever--but that's about to change as consumers start ramping up their medical spending.
A new study published in the journal Health Affairs predicts that healthcare spending will account for almost a fifth of the nation's economy by 2020. Sean Keehan, an economist in the CMS Office of the Actuary and the study's lead author, says growth in healthcare spending will average 5.8 percent through 2020, with an 8.3 percent spike in 2014 when the health reform's coverage provisions kick in, reports The Hill's Healthwatch.
The newly insured people, who will be young and healthy, will start seeing doctors and taking prescription medications, but they will spend less on hospitals and other intensive medical services, according to the study. "They are projected not to use a lot of care," Keehan told the National Journal. "People that are healthy might see a doctor one or two times and nothing more. Some people will be relatively inexpensive to insure."
Additionally, the study estimates that private health insurance enrollment will increase by 4 million between 2011 and 2013, primarily because of the improving economy. In 2014, growth in private health insurance premiums is expected to increase by 9.4 percent, 4.4 percentage points higher because of health reform, as roughly 14 million people obtain private insurance through health exchanges.
Medical costs should begin to level out between 2015 and 2020, with national healthcare spending averaging 6.2 percent per year, Healthwatch notes.