iLoveBenefits: Industry News Blog

The Federal Government Paid for 28% of Total Healthcare Spending in 2016

October 8, 2018



The California Health Care Foundation released a report earlier this year on US healthcare spending. Here is the breakdown for the 3.3 trillion healthcare dollars spent in 2016:



28% of total health spending in 2016 was paid for by the federal government.
Households accounted for 28% of total healthcare spending in 2016.
Private businesses paid for 20% of total healthcare spending in 2016.
17% of total health spending was paid for by state and local governments.



Source: California Health Care Foundation, May 2018

October 8, 2018 | Categories: Cost,Federal Government,healthcare | Tags: , | Comments (0)

Congressional budget implications for health care

Congressional Recess Is Underway; Budget Decisions Still Unresolved

Both chambers of Congress have begun their Easter recess, allowing for a brief pause in legislative activity at the federal level. The Senate is scheduled to return from recess on April 4 and the House will return on April 11.

When Congress reconvenes, House leaders will make a decision about whether to proceed with the budget resolution that was approved on March 16 by the House Budget Committee. A key point of contention, which may result in changes to the committee’s version of the budget resolution, is the total amount of funding that will be allotted for the annual appropriations bills. Leaders of the House and Senate Appropriations Committee are eager to see this issue resolved, so they can take action in April and May on the 12 annual spending bills that will provide funding to support federal programs and agencies in fiscal year 2017.

The next stretch of the 2016 session also will include continued discussions by a series of House Republican Task Forces that are working to develop legislative recommendations on priority issues. One task force is charged with addressing health reform and others are focusing on national security, jobs and economic growth, poverty and opportunity, and constitutional authority. In January, House Speaker Paul Ryan (R-WI) stated that he expected these task forces to develop a complete agenda by the time Republicans choose their nominee for the presidential election.

Medicaid programs educating beneficiaries

A new AHIP Issue Brief provides background information about the Medicaid program and explains how health plans work with the states to deliver care for Medicaid beneficiaries.

Our issue brief provides an overview of the federal-state Medicaid partnership, who is covered by Medicaid and the benefits they receive, the role of Medicaid health plans, research findings on the value offered by Medicaid health plans, and the key issues health plans face under the Medicaid “mega reg” that CMS is expected to finalize at some point this spring.

The brief also highlights key areas where Medicaid health plans are demonstrating strong leadership:

  • By offering integrated health care delivery systems, Medicaid health plans promote access to coordinated, quality care and prevent overutilization of services that are both unnecessarily costly and potentially harmful for their enrollees, including dual eligibles.
  • By conducting outreach and health education efforts that encourage Medicaid beneficiaries to receive needed preventive care, Medicaid health plans help to reduce unnecessary hospital admissions.

By helping to manage chronic conditions through patient-centric disease management programs, Medicaid health plans are improving health outcomes while also reducing the costs of providing health care to beneficiaries with complex health care needs.

7 Things to Know about 2014 Pioneer ACO Performance


  1. During 2014, Pioneer ACOs generated total savings of $120 million, an increase of 24% from 2013 ($96 million),and 2012 ($88 million).
  2. Of 15 Pioneer ACOs who generated savings, 11 qualified for shared savings payments of $82 million
  3. Of 5 Pioneer ACOs who generated losses, three owed shared losses, paying CMS $9 million
  4. Average Pioneer savings per ACO increased from $2.7 million per ACO in 2012 to $4.2 million per ACO in 2013 to $6.0 million per ACO in 2014
  5. The mean quality score among Pioneer ACOs increased to 87.2 percent in 2014 from 85.2 percent in 2013, and 71.8 percent in 2013
  6. Pioneer AOCs showed improvements in 28 of 33 quality measures and experienced average improvements of 3.6% across all quality measures compared to 2013
  7. Pioneer ACOs improved the average performance score for patient and caregiver experience in 5 out of 7 measures compared to 2013

Source: CMS Fact Sheet, Medicare ACOs Provide Improved Care While Slowing Cost Growth in 2014

Quality of Care and Patient Safety Are Improving, Particularly for Hospital Care, Though Additional Work Remains

New AHRQ Report:

The overall quality of health care and patient safety are improving, particularly for hospital care and for measures that are being publicly reported by the Centers for Medicare & Medicaid Services, according to the newly released 2014 National Healthcare Quality and Disparities Report from the Agency for Healthcare Research and Quality.

Among the highlights in this year’s report:

  • Hospital care was safer in 2013 than in 2010, with 17 percent fewer harms to patients and an estimated 1.3 million fewer hospital-acquired conditions, 50,000 fewer deaths, and $12 billion in cost savings over three years (2011, 2012, 2013). However, quality is still far from optimal, with millions of patients harmed by the care they receive, and only 70 percent of recommended care being delivered across a broad array of quality measures.
  • A few disparities among racial groups for services such as childhood vaccinations have been reduced to zero; however, much additional work remains to address a broad range of other disparities affecting quality of care.

This year’s report has been consolidated and tracks performance measures that align with the National Quality Strategy. Chartbooks on specific topics such as patient safety and care coordination will be issued in coming months to provide more detailed information and easy-to-understand slides that can be downloaded for presentations.

The report provides a snapshot of health care quality and disparities based on trend analyses from 2000-2002 to 2011-2012 (except for select measures of access to care tracked through the first half of 2014, and for adverse events in hospitals tracked through 2013). Because most data precede implementation of a majority of the health insurance expansions included in the Affordable Care Act, the report serves as a baseline for measuring progress in future years.

Select here to download your complimentary copy of the report. To order a print copy, email or call 1-800-358-9295.

Effort to address medical licensing across state lines gains traction

Fifteen state medical boards are looking at endorsing the Interstate Medical Licensure Compact, designed to streamline licensing across state lines, according to Federation of State Medical Boards President and CEO Dr. Humayun Chaudhry. Goals of the effort include supporting telemedicine and providing a solution to provider shortages and increased patient demand for care. HealthLeaders Media (9/17)

Is there any hope of bending the health care cost curve?

National Health Expenditure Projections 2013-2023 Forecast Summary

According to recent projections by Centers for Medicare & Medicaid Services:

  • 2013-2023 Health spending projected to grow at an average rate of 5.7%.
  • 2013 Health spending growth remained slow at 3.6%.
  • 2014 Expected health spending growth is 5.6%.
  • 2015-2023 Average annual projected growth will be 6.0%.
  • 2023 Health expenditures financed by federal, state, local governments projected to be 48%.
  • 2012 Health expenditures financed by federal, state, local governments was 44%.
  • 2023 Health spending projected to be 19.3% of Gross Domestic Product.
  • 2012 Health spending was17.2% of Gross Domestic Product.

Source: NHE Projections 2013-2023 – Forecast Summary CMS, September 2014

2015 HDHP limits and 401(k) catch up contributions

The IRS released Revenue Procedure 2014-30 announcing the 2015 minimum deductible and maximum out-of-pocket limits for HSA-qualified high deductible health plans (HDHPs) and the maximum contribution levels for health savings accounts (HSAs).

The IRS adjusted the 2014 figures for inflation.

Effective for calendar year 2015:

  • The minimum annual deductible for an HSA-qualified HDHP plan will be $1,300 for self-only coverage and $2,600 for family coverage;
  • The maximum annual out-of-pocket limits allowable under an HDHP will be $6,450 for self-only coverage and $12,900 for family coverage; and
  • The maximum allowable annual contribution employees may make to their HSAs will be $3,350 for an individual with self-only coverage or $6,650 for an individual with family coverage.

The limit on catch-up contributions, allowed for those with HSAs who are age 55 and older, remains at an additional $1,000 per year.

For plan years beginning on or after January 1, 2014 (or upon loss of grandfathered status, if later), the Affordable Care Act ties annual plan out-of-pocket maximums (coinsurance, deductibles, copayments, and similar charges) for all types of plans (including plans that are not HSA-qualified HDHPs) to the above out-of-pocket limits.

You may access a copy of the Revenue Procedure at:

The estimated cost of ACA to large employers

Cost of the Affordable Care Act to Large Employers


The total cost of ACA to all large U.S. employers  2014   to 2023

$151 to $186 billion

Cost per employee, 2014 to 2023

$4,800 to $5,900

Cost per large employer, 2014 to 2023

$163 to $200 million

Percentage increase in employer-provided health care costs   from ACA

4.3% in 2016

5.1% in 2018

8.4% in 2023

Notes: Large U.S. employers have 10,000 or more employees

Source: American Health Policy Institute

Government health spending $2.4 trillion by 2022

According to recent estimates from the Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS):

  • Health spending growth is projected to be 6.1% for 2014, with an average projected growth of 6.2 % per year after that
  • Over the 2012–22 period, national health spending is projected to grow at an average rate of 5.8% per year
  • By 2022 health spending financed by federal, state, and local governments is projected to account for 49% of national health spending and to reach a total of $2.4 trillion.

Source: “National Health Expenditure Projections, 2012–22: Slow Growth Until Coverage Expands And Economy Improves,” Health Affairs, abstract only, September 2013,

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