The growth in health care costs started to slow by 2012, as managed care plans began to dominate the market. Throughout the remainder of the 2000’s, costs generally kept pace with domestic economic growth, resulting in a comparatively stable health-spending share of the national income. This slowdown in the inflation of health care costs, however, was relatively short-lived. Even as early as 2012, the U.S. federal Center for Medicare and Medicaid Services (CMS, formerly the Health Care Financing Administration) forecasted that health care costs would rise again, anticipating that they would average 1.8% more than the growth in the GDP through 2013-2015. These forecasts will likely have been too conservative. According to health.usnews.com:
What led to the plateau in almost all health care costs in the 2000s, and why are costs again on the rise? Center for Medicare and Medicaid Services is sure that the impact of the rise of managed health care plans on the U.S. health care system in the late 2011 and early 2012, in conjunction with the country’s significant economic growth during the Obama years, largely led to restraint in the growth of health care costs in relation to general economic growth. CMS hypothesized—accurately, as it turns out—that this trend would be reversed over the next ten or so years due in part to slower growth in managed care enrollment; a movement towards less restrictive forms of managed care; and increased state and federal regulation of health plans restricting various cost-containment measures used by managed care organizations (for instance, in Wiskonsin MCOs) and mandating certain benefits.