Fix Health Care Policy

New Report Shows Health Spending Spikes Under Obamacare

The Centers for Medicare and Medicaid Services Office of the Actuary (OACT) just released its projections for national health spending through 2021. The picture isn’t pretty, as health spending will continue to increase at a much faster rate than the gross domestic product (GDP), consuming 19.6 percent (almost one-fifth) of the nation’s economy in 2021.

Growth in health spending will remain modest until 2014, when Obamacare expands Medicaid to an additional 19.6 million Americans and creates exchanges to regulate private insurance and administer new federal subsidies. Once these changes go into effect, Medicaid spending will increase by 18 percent, and private health insurance spending will increase by 7.9 percent, since more people will gain coverage through the government-run exchanges. According to OACT, “Together, Medicaid and private health insurance spending contribute to an overall acceleration in projected national health spending growth to 7.4 percent, which is 2.1 percentage points faster than would be expected in the absence of health reform.”

The Obama Administration clearly chose to wear rose-tinted glasses to interpret the projections. In an interesting twist on the CMS report, Secretary of Health and Human Services (HHS) Kathleen Sebelius touts “No increase in national health spending as a percent of GDP for five years.” But the Secretary backdates the projections, going on to say, “From 2009 through 2013, national health spending will not increase as a percent of the economy.” Of course, she knows that the major provisions of Obamacare don’t begin until 2014.

(Read the rest on The Foundry…)

Tags: CMS, GDP, Medicaid Expansion, national health spending, ObamaCare