Wednesday, May 7, 2014

Per Capita Health Spending for Elderly Grows at Lowest Rate among all Age Groups from 2002-2010

According to a New Report from the CMS Office of the Actuary

Dan Ciolek
Average annual growth in per capita personal health care spending for the elderly was 4.1 percent from 2002 to 2010, the lowest among any other age groups studied, according to a report by the Centers for Medicare & Medicaid Services’ Office of the Actuary released and published in the journal Health Affairs. 
The report found that growth in spending among groups over this time period varied, especially during the recent recession. However, the impact of the recession on the elderly is less clear. Per capita spending growth for this group in 2008–10 averaged just 2.4 percent annually, which was lower than growth for the other age groups. Slower Medicare spending and continued slow growth in spending for nursing care facilities and continuing care retirement communities contributed to the low rate of growth.
Also, private health insurance spending per enrollee for those ages sixty-five and older grew slowly, at 3.0 percent annually over the period—the slowest growth rate of private health insurance among the major age groups. Out-of pocket spending per person for the elderly declined 0.4 percent annually over this period.
 Highlights of the report include:
  • Spending for children on a per capita basis grew more rapidly between 2002 and 2010 than the other groups; however, aggregate spending for children grew at the slowest rate at 5.7 percent as their share of the U.S. population declined.
  • The report also found that personal health care spending for females ($7,860) in 2010 was about 25 percent more than males on a per capita basis, but the gap decreased from a peak disparity of 29 percent in 2004.
  • Despite the lower rate of growth among the elderly, per capita spending by the elderly in 2010 ($18,424) continued to be about three times more than the average for working adults ($6,125) and five times more than children ($3,628). 
The Affordable Care Act, signed into law in 2010, includes a number of provisions designed to increase access to affordable health insurance coverage and slow the growth of health care costs. Future releases of this biennial series will include the effects on health spending data by age and gender. It will also take a look at the impact of the baby boomers entering into the elderly age group and becoming eligible for Medicare. The study will also research impacts of provisions such as the requirement for insurers to allow young adults to stay on their parents’ plans until age 26, expanded Medicaid coverage, and the implementation of the Health Insurance Marketplaces.
To read the complete report, visit HERE
An online appendix that accompanies the article describes how historical demographic trends are accounted for when analyzing Medicare spending.  To access the data tables and read the sources and methods, visit CMS Report Statistics & Trends.

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