Its time to add yet another study to the growing list of research showing that ObamaCare isnt delivering on its grand promises.
In the July issue of the journal Health Affairs, Medicares actuaries released new estimates of the rate of growth of national health costs. Surprise, surprise theyre projected to increase over the next decade.
The bad news for ObamaCares proponents? ObamaCare wont help contain health costs, as the president so often claimed while lobbying for passage of his reform package. Instead, it will exacerbate them. Remember his oft-repeated statement that his plan would cut the cost of a typical familys premium by up to $2,500 a year. As the CBO rightly explained, premiums will rise by $2,100.
Researchers estimate that health care spending will grow an average of 5.8% per year through 2020. The actuaries found that total health care costs in this country will hit $4.6 trillion by the end of the decade equivalent to about one-fifth of the entire U.S. economy. Thats about $14,000 in annual spending for every man, woman, and child.
In 2014, when the laws major coverage provisions kick in, total healthcare costs will jump 8.3 percent a rate well above the 5.5% expected for 2013. As the study puts it, the presidents law is anticipated to contribute to a significant acceleration in the national health spending growth rate in 2014.
Worse still, spending on private insurance plans is expected to expand 9.4% that year. That rate is over 4 percentage points higher than the actuaries would have expected without ObamaCare.
The biggest costs from the health law come in the form of expansions in public insurance programs. ObamaCare increases Medicaid spending by over 20 percent in 2014 and will bring the programs total enrollment to 75.6 million people. Over the next eight years, the law increases Medicaid expenditures by a whopping $700 billion.
In 2010, the government spent $1.2 trillion on health care. In 2020, it will spend an astonishing $2.3 trillion, comprising nearly half of all healthcare expenditures. Medicaid alone will account for a fifth of national health spending.
So ObamaCare is certainly fueling the expansion of government health care. But as the Medicare actuaries work shows, its also driving up health costs for private payers as well. In 2014, costs in many major sectors of the health care market are expected to be much higher than they would be without ObamaCares reforms.
Prescription drug spending will jump up 10.7% that year roughly 4 percentage points higher than without ObamaCare. Physician and clinical services will increase by 8.9% over 3 percentage points higher than normal. And hospital spending will increase by 7.2% one percentage point higher than in the absence of reform.
In 2015, the news for ObamaCares cheerleaders gets even worse. The Medicare actuaries predict that some large employers with low-wage workers will begin dropping their existing health plans, leaving their employees to seek coverage in the taxpayer-subsidized exchanges or through Medicaid. Some of these folks would become uninsured, the researchers state surely to the chagrin of the president and his allies.
And even though ObamaCare is set to expand insurance coverage to about an additional 30 million individuals, everyone will still have to spend a substantial amount of money out of pocket on their care. The actuaries predict that the legislations excise tax on high-cost, high-benefit insurance plans will induce many employers to switch to plans with greater levels of cost-sharing.
The White House has repeatedly said that its brand of health reform will bend the healthcare cost curve down. Medicares actuaries have taken a sober look at the numbers and arrived at the opposite conclusion. The American people may not allow President Obama to ignore the preponderance of evidence for much longer.
Counting Up ObamaCare’s Health Cost Inflation
Sally C. Pipes
Its time to add yet another study to the growing list of research showing that ObamaCare isnt delivering on its grand promises.
In the July issue of the journal Health Affairs, Medicares actuaries released new estimates of the rate of growth of national health costs. Surprise, surprise theyre projected to increase over the next decade.
The bad news for ObamaCares proponents? ObamaCare wont help contain health costs, as the president so often claimed while lobbying for passage of his reform package. Instead, it will exacerbate them. Remember his oft-repeated statement that his plan would cut the cost of a typical familys premium by up to $2,500 a year. As the CBO rightly explained, premiums will rise by $2,100.
Researchers estimate that health care spending will grow an average of 5.8% per year through 2020. The actuaries found that total health care costs in this country will hit $4.6 trillion by the end of the decade equivalent to about one-fifth of the entire U.S. economy. Thats about $14,000 in annual spending for every man, woman, and child.
In 2014, when the laws major coverage provisions kick in, total healthcare costs will jump 8.3 percent a rate well above the 5.5% expected for 2013. As the study puts it, the presidents law is anticipated to contribute to a significant acceleration in the national health spending growth rate in 2014.
Worse still, spending on private insurance plans is expected to expand 9.4% that year. That rate is over 4 percentage points higher than the actuaries would have expected without ObamaCare.
The biggest costs from the health law come in the form of expansions in public insurance programs. ObamaCare increases Medicaid spending by over 20 percent in 2014 and will bring the programs total enrollment to 75.6 million people. Over the next eight years, the law increases Medicaid expenditures by a whopping $700 billion.
In 2010, the government spent $1.2 trillion on health care. In 2020, it will spend an astonishing $2.3 trillion, comprising nearly half of all healthcare expenditures. Medicaid alone will account for a fifth of national health spending.
So ObamaCare is certainly fueling the expansion of government health care. But as the Medicare actuaries work shows, its also driving up health costs for private payers as well. In 2014, costs in many major sectors of the health care market are expected to be much higher than they would be without ObamaCares reforms.
Prescription drug spending will jump up 10.7% that year roughly 4 percentage points higher than without ObamaCare. Physician and clinical services will increase by 8.9% over 3 percentage points higher than normal. And hospital spending will increase by 7.2% one percentage point higher than in the absence of reform.
In 2015, the news for ObamaCares cheerleaders gets even worse. The Medicare actuaries predict that some large employers with low-wage workers will begin dropping their existing health plans, leaving their employees to seek coverage in the taxpayer-subsidized exchanges or through Medicaid. Some of these folks would become uninsured, the researchers state surely to the chagrin of the president and his allies.
And even though ObamaCare is set to expand insurance coverage to about an additional 30 million individuals, everyone will still have to spend a substantial amount of money out of pocket on their care. The actuaries predict that the legislations excise tax on high-cost, high-benefit insurance plans will induce many employers to switch to plans with greater levels of cost-sharing.
The White House has repeatedly said that its brand of health reform will bend the healthcare cost curve down. Medicares actuaries have taken a sober look at the numbers and arrived at the opposite conclusion. The American people may not allow President Obama to ignore the preponderance of evidence for much longer.
Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.