Health Spending Over The Coming Decade Expected To Exceed Economic Growth

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By Jordan Rau
Kaiser News Staff Writer
Sep 18, 2013

The nation’s total health will bump up next year as the health law expands insurance coverage to more Americans, and then will grow by an average of 6.2 percent a year the next , according to projections released Wednesday by government actuaries.

That estimate is lower than typical annual increases before the recession hit. Still, the actuaries forecast that in a decade, the health care segment of the nation’s economy will be larger than it is today, amounting to a fifth of the gross domestic product in 2022.

 They attributed that to the rising number of baby boomers moving into Medicare and the actuaries’ expectation that the economy will improve, according to their findings published in the journal Health Affairs.

The actuaries were not persuaded that experiments in the health law and new insurer procedures that change the way doctors, hospitals and others provide services will significantly curtain health spending. They assumed “modest” savings from those changes from the law. “It’s a little early to tell how substantial those savings will be in the longer term,” Gigi Cuckler, one of the actuaries, told reporters.

The actuaries also said they are skeptical that the nation has entered a new era of lower health spending, a case that has been made by the Obama administration and many prominent economists. They have predicted a strengthening economy will not be accompanied by sharp health spending hikes. The report expects health spending will rise faster than as the business climate improves. “Until we see evidence that relationship has been broken, it’s very difficult to conclude something structural has occurred,” Stephen Heffler, director of the statistics group at Office of the Actuary at the Centers for Medicaid and Medicare, told reporters.

The actuaries predict that by the end of this year, then…Read more

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