Despite President Obama’s promises to rein in health care costs as part of his reform bill, health spending nationwide is expected to rise more than if the sweeping legislation had never become law.As reported by the Economist:
source: Actuary Report, Exhibit 3
source: Actuary Report, Exhibit 4
Total spending is projected to grow annually by 5.8 percent under Mr. Obama’s Affordable Care Act, according to a 10-year forecast by the Centers for Medicare and Medicaid Services released Thursday. Without the ACA, spending would grow at a slightly slower rate of 5.7 percent annually.
CMS officials attributed the growth to an expansion of the insured population. Under the plan, an estimated 23 million Americans are expected to obtain insurance in 2014, largely through state-based exchanges and expanded Medicaid eligibility.
The federal government is projected to spend 20 percent more on Medicaid, while spending on private health insurance is expected to rise by 9.4 percent.
A new report, published in Health Affairs on July 28th, paints a daunting picture. Health spending will rise by 5.8% each year from 2010 to the end of 2020, according to actuaries at the Centres for Medicare and Medicaid Services (CMS). In 2020 health care will account for one-fifth of America’s economy. The federal government will pay for a greater share than ever before.Reaction from White House staffer Nancy-Ann DeParle:
Hawks have long warned that it would be impossible to curb government spending without curtailing spending on health. Democrats claimed that their health law would lower costs. Barack Obama assembled grey-haired sages to recommend changes to entitlement programmes. Paul Ryan, the Republican chairman of the House Budget Committee, offered his own reforms. And yet spending on health care continues to climb.
[T]he report doesn’t tell the whole story.Conclusion: What are "changes. . . that typically don't show up on an accounting table"? If you can't count the savings, do they exist? I agree with Bruce McQuain at Hot Air:
The Affordable Care Act creates changes to the health care system that typically don’t show up on an accounting table. We know these new provisions will save money for the health care system, even if today’s report doesn’t credit these strategies with reducing costs.
Bottom line, we were sold a lemon, a bill of goods, snake oil. All the ACA does is give the government a legal ability to intrude deeper and deeper in a market it really has no business being in at all and to distort that market even further. And that’s precisely what is going to happen. We all know that when government gets in as deep as it will be in this market, nothing ends up "costing less".(via Heritage Foundation)