Choose your spin on health care costs

All of the following are interpreting the same report, all add their own spin on the numbers. When the growth in costs was lower, it was credited to Obamacare even when it was barely in effect. Now the numbers are higher and it is again attributed to Obamacare because, of course, with more people using health care and more generous benefits required for all, what else was going to happen?

These are aggravate numbers remember and do not reflect what is happening to most individuals who had coverage before the Affordable Care Act. They also do not reflect what is happening to premiums within the Obamacare exchanges.

The cost of health care reflected in premiums and out-of-pocket cost includes:

  • your share of the premium,
  • the number and type of services being used by a group,
  • the prices for those services and
  • your cost for deductibles and co-payments and co-insurance.

By those measures most workers are finding their costs increasing by far more than five percent. Just ask your friends and relatives.

First read the following press release:

CMS Releases 2014 National Health Expenditures

Aggregate health expenditures increase as millions gain coverage and prescription drug costs increase; spending growth remains below rates seen prior to the Affordable Care Act

In 2014, per-capita health care spending grew by 4.5 percent and overall health spending grew by 5.3 percent, a study by the Office of the Actuary at the Centers for Medicare & Medicaid Services (CMS) published today as a Web First by Health Affairs. Those rates are below most years prior to passage of the Affordable Care Act. In addition, consumer out-of-pocket spending grew by only 1.3 percent in 2014, as compared to 2.4 percent growth in 2013, reflecting the increased number of individuals with health coverage.

The report concludes that the increase in spending growth from 2013 was primarily driven by millions of new people with health insurance coverage a result of the Affordable Care Act and by rapidly rising prescription drug costs. Overall, spending on prescription drugs grew by 12.2 percent in 2014, compared to 2.4 percent growth in 2013, fueled largely by spending for new medicines, particularly for specialty drugs such as those used to treat hepatitis C. On a per-enrollee basis, overall spending increased by 3.2 percent in private health insurance and 2.4 percent for Medicare and decreased by 2.0 percent in Medicaid.

“Millions of uninsured Americans gained health care coverage in 2014,” said CMS Acting Administrator Andy Slavitt,” And still, the rate of growth remains below the level in most years prior to the coverage expansion, while out-of-pocket costs grew at the fifth lowest level on record.”

The Affordable Care Act allowed 8.7 million individuals to gain coverage in 2014 compared to 2013. As a result, the insured share of the population increased from 86.0 percent in 2013 to 88.8 percent in 2014, the highest share since 1987, according to the authors.

Overall, health care spending grew 1.2 percentage points faster than the overall economy in 2014, resulting in a 0.2 percentage-point increase in the health spending share of gross domestic product – from 17.3 percent to 17.5 percent. In the decade prior to the Affordable Care Act (2000-2009), health care spending grew by an average of 6.9 percent annually, 2.8 percentage points faster than GDP.


What the above fails to consider is that relative to overall inflation the numbers are not that good. In the decades before Obamacare, inflation was higher than it has been in the last several years. And inflation was considerable higher in the decades when health care was in double digits.

Then read this from the Wall Street Journal

WASH­ING­TON—Growth in U.S. healthcare spending is ac­cel­er­at­ing af­ter reach­ing his­toric lows, a pickup largely at­tributed to the millions of Amer­icans who have got­ten health cov­er­age un­der the Af­ford­able Care Act.

Spend­ing on all health care in­creased 5.3% in 2014, ac­cord­ing to a re­port Wednes­day from ac­tu­ar­ies at the Cen­ters for Medicare and Med­icaid Ser­vices. That com­pares with the 2.9% growth in 2013, which marked the low­est rate since the govern­ment be­gan track­ing the gains 55 years ago.

The re­turn to more robust growth af­ter a slowdown in spend­ing had been an­tic­i­pated by econ­omists. Still, it is likely to add to criticism that the 2010 health law isn’t do­ing enough to rein in costs. The re­port, based on 2014 gov­ern­ment num­bers and published in the jour­nal Health Af­fairs, fol­lows five con­sec­u­tive years where av­er­age spend­ing growth was less than 4% an­nu­ally… 

The Obama ad­min­is­tration called the es­ca­lat­ing growth in U.S. healthcare spend­ing tem­po­rary and said it hasn’t trans­lated into higher costs for people who al­ready had health cov­er­age.

Then read this from the Houston Chronical.

U.S. health care costs in 2014 grew at the fastest pace recorded since President Barack Obama took office seven years ago, according to new federal statistics, raising concerns about the sustainability of our medical-industrial complex.

“After five years of historically low growth, national health expenditures increased by 5.3 percent in 2014, reaching $3 trillion, or $9,523 for every man, woman and child,” the Associated Press reported Wednesday. “That followed a 2.9 percent increase for 2013. Such seemingly small percentage shifts resonate when the total is $3 trillion.”

The jump is both shocking and predictable. Obamacare is providing more Americans than ever before access to health care, and many of them are sick and need remedial treatment. The latest statistics are not so much an indictment of the Affordable Care Act as they are proof that health care reform was needed.

Yes, and health care reform is still needed. The Affordable Care Act did virtually nothing to reform health care except for marginal attempts within Medicare which are still yet to be proven effective.

Even if not one additional person enrolled in health insurance, Obamacare raised the cost of health care coverage for everyone. 



  1. Health Reform accomplished what was intended – an expansion in health coverage, with NO focus on managing the cost of medical services or utilization. Now we have 10+MM Americans with new coverage that they would not have bought had they had to use their own money. The Democrats responded to their wish – I want the best health coverage YOUR money will buy!

    Any wonder how we got here?


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