Cost and Financing

After years of health policy experts speculating about ways to "bend the health care cost curve," new government statistics for 2009 and 2010 provide some good news. The health spending growth rate in 2009 was the lowest in the 51-year history of the National Health Expenditure report. The 2010 growth rate of 3.9 percent was just 0.1 percentage point higher than the low 2009 rate according to the article by government analysts published in the January issue of the journal Health Affairs.

Michigan Rep. Joel Johnson says he entered elective office this year looking to save taxpayers money whenever and wherever he could. Within weeks, he found one of his first targets: a health care benefit for him and his legislative colleagues.

The 9th U.S. Circuit Court of Appeals ruled yesterday against mandatory co-pays that Arizona charges poor and disabled persons when they use Medicaid health services. The co-pays were approved by U.S. Department of Health and Human Services Secretary Kathleen Sebelius under Medicaid state plan waiver provisions.

The Court said that the federal law provides for waivers as long as a program has a "research or demonstration value" but that the record clearly showed that the Arizona co-pays were put into place to save money in the state's Medicaid budget.

Consumers and health policy experts have all known about the differences in health insurance premiums across states. There have been plenty of anecdotal stories, but real data have been hard to come by.

Not now. A new report from the Kaiser Family Foundation found the state-by-state variation was substantial, ranging from a high of $400 per member per month in Vermont and Massachusetts to a low of $136 in Alabama. The data came directly from filings with the National Association of Insurance Commissioners (NAIC) by insurers.

A new report by the Medicare Office of the Actuary estimated that health spending will grow by an average of 5.8 percent a year through 2020, compared to 5.7 percent without the health overhaul. With that growth,  the nation is expected to spend $4.6 trillion on health care in 2020, nearly double the $2.6 trillion spent last year.

However, the report estimates that spending on health will accelerate this year because the economy is expected to improve and people would have more disposable income to spend on medical care.

One more silver bullet for reducing the seemingly inevitable rise in health care costs has been called into question.

Yesterday, Massachusetts Attorney General Martha Coakley released a study finding that the so-called “global payment” system instituted in 2009 has not saved health care costs. This payment system provides a per-patient monthly payment rather than making payments in the more traditional fee-for-service way.

A new report from Milliman, Inc., a consulting and actuarial firm, shows total health care costs are $19,393 for the typical American family of four covered by a perferred provider organization. In 2002, the same family's overall costs were $9,235. These totals include the employer and employee shares of health care costs.

The Kaiser Family Foundation released a report today that examines the probable impact of the Congressional proposal to make Medicaid a block grant program. The report estimates  federal government spending on Medicaid would fall by $1.4 trillion (34 percent) in the decade between 2012 and 2021.

However, these federal budget savings come at the expense of states. By 2021, states would receive $243 billion less annually in federal Medicaid money than they would under current law, a 44 percent reduction.

In November, the federal government issued regulations that spell out how much insurance companies must spend on medical care.


As states expand access to health insurance coverage under federal health reform, big questions remain about how to simultaneously improve the quality of health care and slow the growth in health costs. This session will focus on how some states have implemented innovative comprehensive programs to address these elusive policy goals.  Presenters will also provide program examples in the areas of administrative efficiencies, prevention and wellness, patient centered health homes, and payment reforms that have proven successful and are ready for replication by other states.