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Two years in a row, health-spending growth sluggish

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Health-care spending continued a sluggish trend in 2010, with a second straight year in which Gross Domestic Product grew faster than spending on medical costs.

As the economy began to recover, GDP rose by 4.2 percent, while health-care spending grew by 3.9 percent — just one percentage point higher than in 2009, according to a report released Monday by the Centers for Medicare and Medicaid Services (CMS) and published in Health Affairs.

CMS actuaries said it’s typical for health care spending to lag behind economic recoveries for several reasons: because insurance contracts are negotiated a year or more in advance, the availability of government-sponsored insurance programs and the opportunity for some of the unemployed to obtain coverage through a spouse.

The Obama administration turned the news into an opportunity to tout the president’s new health-care law. Writing on the White House blog, spokeswoman Nancy-Ann DeParle said the Affordable Care Act would keep the growth low, even after the economy recovers.

“The Affordable Care Act includes numerous policies to continue this slow growth,” she wrote. “By fighting fraud, better coordinating care, preventing disease and illness before they happen, and creating a new state-based insurance marketplace, we are helping to keep health care cost growth low.”

The report also reflected a provision in the 2009 stimulus bill providing the states with extra federal dollars to fund their Medicaid programs. It found that the federal government financed a larger share of health expenditures in 2010, while businesses, households and state and local governments contributed a smaller share.

But overall, the share of GDP devoted to health care spending didn’t change, holding steady at 17.9 percent.

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