Slow Growth in Medicare and Medicaid Spending per Enrollee Has Implications for Policy Debates

Brief

Slow Growth in Medicare and Medicaid Spending per Enrollee Has Implications for Policy Debates

February 11, 2019

Abstract

Between 2006 and 2017, growth in spending per enrollee in Medicare and Medicaid was much slower than in private insurance according to a new analysis by John Holahan and Stacey McMorrow of the Urban Institute, with funding from the Robert Wood Johnson Foundation. Medicare and Medicaid spending per enrollee grew 2.4 percent per year and 1.6 percent per year, respectively, compared to 4.4 percent per year for private insurance.
While overall spending growth for Medicare (5.2% per year) and Medicaid (6.0% per year) exceeded growth in private spending (4.4% per year), the authors attribute this to much faster enrollment growth in public programs compared to private coverage. Average annual enrollment increased 2.8 percent for Medicare and 4.3 percent for Medicaid while private coverage enrollment stayed relatively flat.
The authors found that changes in specific types of health care spending affected Medicare, Medicaid, and private insurers differently, especially for prescription drugs, administrative costs, and hospital services.

Research Area: 

Centers

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