ECONOMIC REPORT OF THE PRESIDENT

Figure 1-12
Growth in Real Costs for Employer-Based
Family Coverage, 2000–2016
Average Annual Percent Growth
8
7
6
5
4
3
2
1
0
5.6
Total
Premium
7.2
3.1 3.1 3.1
Worker
Contribution
5.1 5.2 5.1
Employer
Contribution
Premiums for Family Coverage
1.5
Worker
Contribution
+ Estimated
Out-of-
Pocket Cost
2000–2010
2010–2016
2.4
Total
Premium
+ Estimated
Out-of-
Pocket Cost
Note: Out-of-pocket costs were estimated by first using the Medical Expenditure Panel Survey to
estimate the out-of-pocket share in employer coverage for 2000–2014 and then applying that
amount to the premium for each year to infer out-of-pocket spending. The out-of-pocket share for
2015 and 2016 was assumed to match 2014. Inflation adjustments use the GDP price index. GDP
price index for 2016 is a CBO projection.
Source: Kaiser Family Foundation/Health Research and Educational Trust Employer Health
Benefits Survey; Medical Expenditure Panel Survey, Household Component; CEA calculations.
Health care costs have grown exceptionally slowly since the ACA
became law. Prices of health care goods and services have grown at a slower
rate under the ACA than during any comparable period since these data
began in 1959, and recent years have also seen exceptionally slow growth in
per-enrollee spending in both public programs and private insurance. The
reforms implemented in the ACA have made an important contribution to
these trends. CBO estimates imply that the ACA has reduced the growth rate
of per-beneficiary Medicare spending by 1.3 percentage points per year from
2010 through 2016, and “spillover” effects of these reforms have subtracted
an estimated 0.6 to 0.9 percentage points per year from the growth rate of
per-enrollee private insurance spending over the same period. Moreover,
there is reason to believe that the ACA has had systemic effects on trends in
costs and quality that go beyond these estimates.
Because of slow growth in costs in employer coverage, illustrated in
Figure 1-12, the average costs for a family with employer-based coverage
in 2016 were $4,400 below where they would have been had costs grown at
their pace over the decade before the ACA became law. Similarly, the premium
and cost sharing amounts incurred by the typical beneficiary enrolled
in traditional Medicare in 2016 are about $700 below 2009 projections, even
before accounting for reductions in cost sharing for prescription drugs due
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