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Obamacare has little to do with slow growth in health costs

Teresa Tanoos's picture

Despite a slight increase in health care spending by Americans in 2012, the rate at which health costs have grown has slowed down, according to a report from government actuaries released this week.

The report is the latest from actuaries for the Centers for Medicare and Medicaid Services on what Americans spend on health care, which found that spending increased slightly in 2012 at a rate of 3.7 percent, or $2.8 trillion.

Also in 2012, the United States spent $8,915 per person on hospital costs. That’s the equivalent of 17.3 percent of gross domestic product, which is more than any other country.

Published in the journal Health Affairs, the actuaries reported a reduction in prescription costs due to recent generic versions of many popular and formerly expensive “brand name” medications, such as Lipitor, which has since become available generically.

Meanwhile, health insurers paid more for medical expenses, which the White House administration is trying to take credit for, although the actuaries found that Obamacare, formerly known as the Affordable Care Act, essentially had nothing to do with it.

According to the report, 2012 was the fourth year in a row of relatively low and stable growth in the U.S. – and the actuaries say that such growth has been “relatively” stable during all that time.

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During those four years, in fact, growth in health care spending has happened at the slowest rates ever recorded in the 53-year history that the actuaries have been reporting on the nation’s health spending.

The report does say that spending increased slightly in some areas. However, the increased spending was balanced by reduced spending in other areas.

In the U.S., for example, people spent 4.9 percent more for medical care in 2012. That’s just a bit higher than what they spent in 2011, which was 4.6 percent. While widespread reports have suggested that Americans spent more cash on health care in 2012, the actuaries found that out-of-pocket costs increased just 3.8 percent that same year.

In the meantime, the debate continues between those on the side of the White House who claim the health cost slow-down is because of Obamacare, and those on the side of the government actuaries who report the federal health reform law has little to do with it.

Jeanne Lambrew, Deputy Assistant to the President for Health Policy, wrote in a White House blog that the debate over how much the health cost slow-down is due to Obamacare leaves “no doubt” that it has reduced Medicare spending growth. She further claims “that most experts believe that Medicare savings spill over into the private sector."

However, Aaron Catlin, deputy director of the National Health Statistics group at CMS, disagrees. He told reporters that the slow growth of health care costs is similar to “what we have seen in past recessionary periods", meaning that health spending is still down due to the recession.

SOURCE: Health Affairs, National Health Spending In 2012: Rate Of Health Spending Growth Remained Low For The Fourth Consecutive Year, doi: 10.1377/hlthaff.2013.1254 Health Aff January 2014 vol. 33 no. 1 67-77