Health spending is poised to surge

This article from the Los Angeles Times dated September 19, 2013 indicates that health care spending will increase despite the Affordable Care Act.

It has always been my opinion that lifestyle changes such as proper nutrition, exercise and stress reduction would have a significant impact on health care spending.

Recovering economy, expanded insurance coverage will boost tab, report predicts.


After five years of historically slow growth, the nation’s healthcare tab is poised to accelerate as the federal healthcare law expands coverage and the economy improves, according to a new government report.

Total U.S. spending on healthcare is expected to surge over the next decade, hitting $5 trillion in 2022, economists at the federal Centers for Medicare and Medicaid Services estimate.

That’s up from $2.9 trillion this year, and it will push healthcare spending to nearly 20% of the U.S. economy by the next decade, up from18% this year.

These new numbers show how little President Obama’s Affordable Care Act will do to fundamentally alter the trajectory of healthcare spending.

“The primary emphasis of the health law is to reduce the number of uninsured,” said Glenn Melnick, a USC health-policy professor. “It has limited ways to achieve cost containment. We should be realistic that the law will not substantially slow down spending.”

Over time, supporters of the health law say, the overhaul should generate savings through smaller Medicare reimbursements to medical providers and insurers and from other cost-cutting provisions.

The report issued Wednesday projects that 30 million more Americans will gain health insurance over the next decade under the health law. For the same 10-year period, total spending on healthcare will increase $621 billion, or a nominal 0.1%, because of the Affordable Care Act.

In addition to the coverage expansion, the economic recovery and the nation’s aging population will drive up spending, the federal report said.

The new estimates say the extension of health insurance to about 11 million Americans next year will elevate spending growth to 6.1% in 2014, up from a 3.9% boost this year.

The increases in spending have remained at less than 4% since 2009, the lowest levels since the government began tracking such data in 1960. For the next decade, health spending is estimated to rise 5.8% annually, government economists say, greater than overall eco- nomic growth.

That would mark an improvement from earlier years. Annual growth in health spending was nearly 9%, on average, from 2001-03.

The unexpected slowdown in medical spending in recent years has sparked considerable debate among policy experts and economists about whether the change signaled a temporary reprieve or a longer-lasting trend.

During the recession, many employers scaled back insurance coverage and as a result many patients have postponed care and paid more attention to prices as their deductibles and copays have grown.

Federal economists said historical data suggest health spending will pick up as economic conditions improve.

Enrollment in state and federal health insurance exchanges is set to begin Oct. 1 for millions of uninsured people and consumers who now buy their own policies. In California, officials are hoping to enroll about 1.4 million people next year in a new insurance marketplace called Covered California.

The state exchange will offer federal subsidies to many lower- and middle-income people to help make insurance more affordable. Another1.4 million Californians are expected to get coverage at no cost to them through an expansion of Medi-Cal, the state’s Medicaid program for the poor.

Those changes should assist consumers with their medical bills, according to the federal report. Economists predict out-of-pocket medical spending by consumers will drop 1.5% next year, largely because of increased access to private insurance and Medicaid. Twitter: @chadterhune


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