Overhaul's effect on health spending minimal, government study says

The health overhaul and other recent legislative and regulatory changes will only modestly increase the nation's health tab through 2019, according to a government study published today, Kaiser Health News reports. The Affordable Care Act and several other major changes will increase the annual health spending growth rate by only 0.2 percent, while at the same time extending insurance to millions more people. One economist and author of the report, which appeared in Health Affairs, said, the "effects on health spending are moderate, but the underlying effects on coverage are more pronounced." That could mean that, even though the bottom line remains little changed, the shares of these costs borne by insurers, individuals, government programs and businesses could fluctuate more visibly (Weaver, 9/9).

The New York Times: "The government report, by the office of the chief Medicare actuary, undermines the claims of the law's fiercest critics and some of its biggest champions." Critics had said the overhaul would fuel explosive health spending growth; supporters, that it would curb the already exploding trend. It will do neither, Medicare's economists say. "In 2009, the report said, national health spending, public and private, totaled $2.5 trillion and accounted for 17.3 percent of the economy, as measured by the gross domestic product. The report predicts that health spending will rise to $4.6 trillion and account for 19.6 percent of the economy in 2019." That's up from $4.5 trillion that year, according to an earlier estimate by the same economists (Pear, 9/9).

Los Angeles Times: "By 2019, nearly 93% of the population is projected to have medical coverage, compared with about 84% now. Without the law, the percentage of people with coverage was expected to dip to 83% over the next decade, according to the report." Karen Davis, the president of the Commonwealth Fund, tells the LA Times, "When you cover the uninsured and they get the care they need, you have to spend more money," in explaining the rise in overall spending. But, that spending is largely offset by savings in Medicare (Levey, 9/9).

Reuters: The government researchers predicted a surge in demand for health services in 2014 as most of the overhaul provisions kick in. As many as 16 million people will join health insurance exchanges that year, with up to 30 million joining by 2019. A rise in Medicaid enrollment will also occur in 2014. But, cuts to Medicare Advantage will slow spending growth during the period. The so-called Cadillac tax on high-cost health plans could cause companies to shift more costs to employees, too (9/9).

The Wall Street Journal: The report "casts fresh doubt on Democrats' argument that the health-care law would curb the sharp increase in costs over the long term, the second setback this week for one of the party's biggest legislative achievements." On Wednesday, the Journal had reported that insurers were attributing up to 9 percent premium increases to new requirements in the health law. However, the "White House said the law will lower costs for insured consumers by removing the hidden price they pay to subsidize the uninsured" (Adamy, 9/8).

The Associated Press: "The new bottom line is guaranteed to provide ammunition for both sides of a health care debate that refuses to move offstage. Republicans are vowing repeal if they win control of Congress this fall, although they are unlikely to have enough votes to override an Obama veto." According to the AP, the average per capita cost of health care in 2019 will be $13,652, including the addition of the overhaul. That's $265 more per person than without the overhaul (Alonso-Zaldivar, 9/9).

In a blog post, however, the White House contended that, if the math included only people with insurance coverage, the per-person cost of care actually would go down. White House health czar Nancy-Ann DeParle wrote on the White House blog, "Specifically, by 2019, overall health spending per insured person will average $14,720 instead of the $16,120 projected by the Actuary before the Act was enacted into law. This is great news for many Americans" (DeParle, 9/9).