The ObamaCare Escalator Even HHS now says health spending will rise rapidly again.
Sept. 5, 2014 6:46 p.m. ET
Recall that in 2009 White House economists tried to sell ObamaCare as a health cost-control bill, and some liberals still claim the recent spending deceleration is a result of the law. Well, the federal government's bookkeepers—and reality—beg to differ.
On Wednesday the actuaries at Health and Human Services released their new annual projected measurement of national health expenditures for last year and through 2023. Spending in 2013 grew at a relatively low rate in historical terms for the fifth consecutive year below 4%, though at 3.6% it still outpaced real economic growth. They expect the rate to climb to 5.6% in 2014 and continue rising by 6% a year on average through the decade.
Health spending as a share of the economy rose to 17.2% in 2013 from 16.2% in 2007 and will hit 19.3% in 2023, assuming that GDP grows as smartly as the auditors project. In other words, health care will soak up nearly one of every five U.S. dollars instead of one of six. Taxpayers will finance 48% of that spending a decade out, up from 41% in 2007. Thank you, Peter Orszag.
Notably, HHS attributes the expected health spending spike to economic recovery, Medicare increases with the wave of baby boomer retirements, and "spending growth associated with the coverage expansions in the Affordable Care Act," such as a 23% expansion of Medicaid over the decade. They believe the slowdown of late, meanwhile, to be largely an artifact of the recession and trend toward increased individual cost sharing in the private employer-sponsored market. Medical spending is valuable to the extent Americans are buying longer and healthier lives and financing innovation in treatments and therapies. But government misallocates far too many resources on health-care transfers and subsidized industry inefficiencies that could have been directed to far better and more productive economic uses. Part of the reason economic growth continues to disappoint is that ObamaCare and the larger entitlement state are stealing investment from the private economy. |
