Study: Medicaid, Medicare spending growth slower than private insurance

A study released this week found that Medicare and Medicaid have done a better job at controlling spending than private payers have (Source: “Medicare, Medicaid contain costs better than private insurers, study says,” Modern Healthcare, Feb. 11, 2019).

"After accounting for the enrollment growth in these programs, Medicare and Medicaid have experienced much slower growth in spending per enrollee compared with private health insurance," John Holahan, a fellow at the Urban Institute who authored the study, noted in a statement.

Overall spending on Medicare and Medicaid is growing at a faster rate than spending on private insurance, which largely includes coverage that workers obtain through jobs. But that's because enrollment in public programs has exploded in the past decade while enrollment in private coverage has remained flat, according to the study.

By breaking it down to a per-person basis, the study shows that average spending on private health insurance per enrollee grew 4.4 percent per year between 2006 and 2017—faster than the growth of spending per enrollee in Medicaid and Medicare, and faster than the growth of the gross domestic product per capita, which grew an average 2.4 percent each year.