Policies to Cap Healthcare Spending Growth Successful in Four States

Crucially, the four successful states built in accountability measures to their policy design.

Aug. 25, 2026

Key Highlights

States with enforced cost-growth caps saw healthcare spending grow 2% less than the national average, demonstrating policy effectiveness.
Penalties and accountability measures are key components that determine the success of healthcare cost containment strategies.
Delaware's lack of penalties resulted in no change in healthcare spending, underscoring the importance of enforcement mechanisms.
Most reductions in spending growth occurred in hospitals and nursing homes, indicating targeted areas for cost control.
Effective policies can slow spending without compromising healthcare services, highlighting the potential for sustainable cost management.

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A new report from UCLA Health found that states that enact policies to cap healthcare spending growth can indeed slow that growth if penalties and other accountability measures are built in.

Five states implemented cost-growth programs between 2013 and 2019. They set targets for how much healthcare spending should grow yearly and publicly tracked whether those targets were met. In four of the five states, healthcare costs grew 2% less than the national average (3.7%). Even modest decreases in spending growth can lead to big savings over time.

The four states that successfully stemmed cost growth paired the caps with levers like penalties and hospital price constraints. Delaware, which implemented no penalties to enforce spending limits, saw no change in healthcare spending.

This suggests that crafting the policy and the accountability structure determines whether meaningful spending changes will occur. All of this data also suggests slowing healthcare spending does not necessarily lead to cutting healthcare services. The largest reductions were in hospital and nursing home spending growth.