• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • 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 toutsNo 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.

    In addition, OACT attributes slow growth in health spending between 2009 and 2013 to the poor economic climate, not Obamacare. They explain, “The sustained effects of the recent recession and modest recovery on projected growth in disposable personal income, insurance coverage, and unemployment rates are expected to continue to dampen health spending growth through 2013, much as they affected spending in 2008–10.”

    Obamacare’s expansion of government’s role in health care will be expensive and significantly increase government’s share of spending. CMS projects, “By 2021, federal, state, and local government health care spending is projected to be nearly 50 percent of national health expenditures, up from 46 percent in 2011, with federal spending accounting for about two-thirds of the total government share.”

    Sebelius attempts to respond to Obamacare critics, writing, “Today’s report found that the Affordable Care Act [Obamacare] did not result in increased health care costs. In fact, the report showed a slight decrease in costs in 2011.” It bears repeating: Obamacare’s main provisions don’t begin until 2014. The report shows that Obamacare will actually “add about $478 billion in cumulative health spending” through 2021.

    Instead of playing games with dates and numbers, the Obama Administration should recognize the simple fact that Obamacare doesn’t reduce health spending—it does the opposite.

    Posted in Obamacare [slideshow_deploy]

    3 Responses to New Report Shows Health Spending Spikes Under Obamacare

    1. Mary Holmes says:

      Everyone seems to think this Obamacare willl be free healthcare, but if you read the law, it says in plain english, "Everyone will be required to PURCHASE a health care plan, I figured mine versus what I now have through my employer, I pay just over $100.00 per month now, with the Obamacare I will be paying over $300. 00 per month, and will still be paying for all my meds myself, as well as emergency room costs. If you don't pay your insurance now, you lose it, if you don't pay for Obamacare, the IRS will have access to all your financial and medical records, and can fine you up to $700.00, jail you or both, and can take your tax refund or put a lien on any property or possessions you have. Folks better stop listening to the liars in the media and Washington and read it for themselves before it is too late.

    2. Bobbie says:

      He does misconstrue the terms "affordable health care" which won't happen anytime soon and won't involve any of ALL AMERICA! He's protecting his focus which obviously isn't for any part of the recovery of America. He can tell the public exactly word for word what will "happen" if the republicans don't give into him as the disrespects of this unconstitutional man follows his own rules and will make it "happen." Suspicious all his accomplishments he personally "achieves" doesn't result in what he says. Always problems he ignores to consider yet word for word crisis upon crisis if he doesn't get his way. They're ultimatums at America's expense…
      Members in government have to honor the peoples' constitution and those that flail respect, dismissed.

    3. if this is a free country, then where is our rights?poor poeple cant afford this…obama you have lost my vote, you ashame me

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.

    ×