Obama Admin Actuaries: Obamacare’s Going To Spike Health Care Spending

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Obamacare and an aging population are going to send health care spending far back up beginning next year, according to a Wednesday report. 

According to a report published in the journal Health Affairs by actuaries from federal Obamacare administrator the Centers for Medicare and Medicaid Services, the health-care law is contributing to a renewed boost in health care spending. The findings contradict the White House’s own line on health spending, after officials attempted to claim a recent slowdown in health spending growth as a trimuph of Obamacare.

In 2013, health spending grew at a slower rate of 3.6 percent, according to the Health Affairs study, “as a result of the sluggish economic recovery, the effects of sequestration, and continued increases in private health insurance cost-sharing requirements.” 

Next year, though, CMS actuaries expect health spending to climb even higher, projecting 5.6 percent growth in 2014, 4.9 percent growth in 2015 and 6.1 percent every year afterward through 2023. One primary drivers of the skyrocketing health care spending: Obamacare.

“The combined effects of the Affordable Care Act’s coverage expansions, faster economic growth, and population aging are expected to fuel health spending growth this year and thereafter,” according to the report.

But the Obama administration has bragged that its health-care law was doing the opposite.

“For years, healthcare costs in America skyrocketed, with brutal consequences for our country,” White House health policy adviser Jeanne Lambrew wrote in a January blog post. “The Affordable Care Act, for the first time in decades, has helped to stop that trend.”

The CMS report would appear to contradict that. It largely vindicates some independent health experts’ view that economic downturn over the past several years stopped many Americans from spending on health care. (RELATED: Health-Care Cost Growth To Spike Again In 2015)

The actuaries expect the Medicaid expansion — currently only accepted by 27 states — to boost program spending by 12.8 percent in 2014; but not to worry, Medicaid spending is scheduled to grow only 6.7 percent in 2015, when a temporary boost in payments to health care providers will expire (though that will likely make doctors even more difficult for Medicaid patients to find).

In 2013, that left governments of all levels with a $1.3 trillion bill for health care. But by 2023, federal, state and local governments are projected to be spending $2.5 trillion on health care, due to Obamacare subsidies, the Medicaid expansion and Medicare growth.

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Sarah Hurtubise