Report: Health reform costs raise overall spending slightly

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Health spending will rise a little quicker than previously estimated under the administration's new health reform law, but it is not expected to dramatically upend spending patterns over the next decade, according to a new government report. That could be good news for providers, who nonetheless face the prospect of significant Medicare payment cuts under reform.

Health spending will hit an annual growth rate of 6.3%, according to the report from the office of the top Medicare actuary, which was published in the journal Health Affairs on Thursday. That is slightly more than the 6.1% forecast before reform passed.

The cost of ballooning Medicaid rolls will be largely offset by Medicare cuts and taxes on high-end health plans offered by employers, report authors say. “In the aggregate, it appears that the new law will have a moderate effect on health spending growth rates and the healthcare share of the economy,” said Andrea M. Sisko, the principal author of the report. It states that overall health spending will be $4.6 trillion and 19.6% of the overall economy by the end of this decade, just marginally more than what the same team predicted in February.