Minus the law, total spending growth in 2014 would be 5.3%, projections show. That projection is not an accurate reflection of what could happen to spending should the U.S. Supreme Court repeal the law, but instead seeks to capture spending had the health reform law never been enacted, said John Poisal, deputy director of the national health statistics group in the CMS Office of the Actuary.
A U.S. Supreme Court decision expected by the end of the month could invalidate some or all of the law.
Projections based on repeal would need to account for provisions since the law was enacted that have already led to savings and spending as well as provisions that might survive in the marketplace despite repeal, Poisal said.
Major insurers last week said they would continue some popular provisions of the law, such as coverage for dependents through age 26, regardless of the court's decision. (See related story: "Insurers fail to impress")
The Affordable Care Act accounts for just 0.1 percentage points of the projected annual average health spending growth of 5.7% through 2021, or $478 billion.
Collins, of the Commonwealth Fund, said the law's additional expense is minor compared with the benefit. “For a very modest increase in spending, we get an enormous increase in people who are brought into the health insurance system,” she said. Thirty million are expected to gain insurance through 2021, according to the CMS.
An economic recovery and demand for medical care from aging baby boomers will accelerate spending between 2015 through 2021. More insured will also contribute to spending, but new policies will check growth as well.
“The growth rate in 2014 is largely influenced by the coverage expansions but once you go into 2015 through 2021, you still have continuing effects of the coverage expansions,” said Gigi Cuckler, an economist in the CMS Office of the Actuary. “However, you have a lot of Medicare cost-savings provisions also in play here that are bringing down the costs at this time.”
By 2021, health spending will account for 19.6% of the gross domestic product compared with 17.9% in 2010, the paper said.
The projections also reflect a scheduled 30.9% cut to physician Medicare payment rates in Jan. 1, 2013, and the up to 2% Medicare reduction to providers and insurance plans under the Budget Control Act of 2011. The 2% Medicare reduction amounts to $11 billion in 2013, according to the Center on Budget and Policy Priorities.