Imagine this. Health care costs on the rise. Actually it’s not hard to imagine and the reasons were to be expected. However, given all the claims for Obamacare and the cuts in Medicare payments, it is interesting that spending by the federal government will increase (no doubt due in large part from the PPACA premium subsidies).
As far as the decline in the share paid by households goes, that is no doubt true on average, but for the majority of Americans who had insurance before Obamacare, especially employer-based coverage, cost shifting, higher premium sharing and the significant trend toward high deductible health plans means their out-of-pocket costs are heading nowhere but up.
WASHINGTON — Government experts on Wednesday predicted a rebound in national health care spending, after four years of exceptionally slow growth, because of expansions in coverage and improvements in the economy.
The combined effects of the Affordable Care Act, faster economic growth and the aging of the population will fuel the growth of health spending this year and in the coming decade, according to a report by a team of nonpartisan economists and actuaries at the Centers for Medicare and Medicaid Services.
“The period in which health care has accounted for a stable share of economic output is projected to end in 2014, primarily because of the coverage expansions of the Affordable Care Act,” said the report, by Andrea M. Sisko and colleagues at the federal health care agency.
Still, they said, even as millions of people gain coverage, the average annual rate of increase in health spending through 2023 will be somewhat lower than it was in the two decades before the recession that began in 2007.
The expected increases will be somewhat dampened, the report says, by slower growth in Medicare payment rates required by the new health care law and by a trend toward higher co-payments and deductibles, which could inhibit the use of health care by many people with private insurance. In addition, they said, a new excise tax on high-cost employer-sponsored health plans, starting in 2018, “is expected to slightly constrain premium growth.”
In their annual projections of health spending, the experts predicted that the total would climb 5.6 percent this year and then an average of 6 percent a year until 2023, when health care will account for 19.3 of the nation’s total output or two percentage points more than last year.
By 2023, the report said, national health spending will total $5.2 trillion, up from $2.9 trillion in 2013. The federal share of all health spending will increase, and the share paid by state and local government will remain constant while the shares paid by households and private businesses will decline a bit, said the report, published online Wednesday in the Journal of Health Affairs.