Healthcare spending could fall $770 billion short of experts' predictions
U.S. healthcare spending has been slowly increasing over the past several years due to several factors. In a May 2013 Health Affairs report, researchers noted that healthcare spending growth has slowed in each of the past four years. The economic downturn from 2007 to 2009 played a pivotal role in this trend, accounting for 37 percent of the slowdown in healthcare spending nationwide between 2003 and 2012.
However, analysts stated that at least 55 percent of the healthcare spending decline cannot be explained but said that a variety of factors may have influenced the decrease over the past several years. For example, new pharmaceuticals and increased patient cost sharing are just two of the factors that could have affected healthcare spending growth and may play significant roles in medical costs for many Americans in the near future.
Additionally, researchers predicted that a substantial decline in healthcare spending growth could have widespread effects on Americans. If current trends continue from 2013 to 2022, healthcare spending could drop as much as $770 billion below experts' predictions.
How does the healthcare spending slowdown affect Americans?
Due to the current economic climate, many Americans have been unwilling to invest significant resources in their healthcare plans. Larry Levitt, senior vice president at Kaiser Family Foundation (KFF), told CNNMoney that fewer American workers are receiving healthcare coverage from their employers as the nation is gradually recovering from the economic downturn.
"When people feel less secure, they are more hesitant to use the healthcare system," Levitt told the news source.
In 2012, national healthcare expenditures totaled $2.8 trillion, and an April 2013 KFF report showed that even a minor healthcare growth rate decrease could impact millions of Americans. For instance, decreasing the growth rate by 1 percentage point on average over the next decade could lower total healthcare spending by almost $500 billion.
While some healthcare experts predict a substantial drop in healthcare spending growth over the next several years, others stated that the country's recovery from the recession could deliver significant results. KFF notes that healthcare spending growth may remain flat if inflation and gross domestic product growth stay at modest levels.
For the time being, many Americans could face tough decisions regarding healthcare coverage, but several cost-effective options are available. For example, consumer-directed healthcare plans (CHDPs) are affordable, dependable choices and can be paired with tax-free health savings accounts (HSAs) or health reimbursement arrangements (HRAs) to help people save money on a wide variety of medical expenses.
*Note: Content provided is not intended as legal or tax advice.