Medicare Outperforms Private Health Insurance in Containing Spending

April 3, 2003
A new study finds that over the past 30 years, Medicare health care spending per enrollee rose at a slower rate than private health insurance spending.

The analysis reveals that per-enrollee Medicare spending grew at an average of 9.6 percent per year from 1970 to 2000 -- slower than the 11.1 percent average annual growth rate found for private health insurers.

The study also compared spending for comparable health care services, revealing that private insurance still experienced a higher cumulative rate of spending growth than Medicare over the three decades. Medicare's long-term success in holding down spending, the authors say, is due partly to its structured payment systems and regulatory controls.

The study appears in the March/April issue of Health Affairs.