“Two main factors were responsible for health spending growth in 2014-coverage expansion associated with the Affordable Care Act and faster growth in prescription drug spending”, Office of the Actuary accountant Anne B. Martin said.
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A report issued in May found that insurance companies for half a million Americans spend $50,000 or more a year on prescription drugs, and a group of cancer specialists complained that all new cancer drugs approved by the Food and Drug Administration in 2014 cost more than $120,000 a year.
President Obama has repeatedly credited the dramatic slowdown in health spending as proof positive that ObamaCare was “bending the cost curve” down in health care.
After five years of historically low growth, national health expenditures increased by 5.3 percent in 2014, reaching $3 trillion, or $9,523 for every person.
When it comes to goods and services, spending on retail prescription drugs hit $297.7 billion in 2014, a 12.2% increase – a large difference from 2013’s 2.4% increase and the largest rise in spending since 2002. Total Medicare spending per enrollee grew by 2.4% in 2014, the report states.
Moreover, he said, despite extenuating circumstances such as soaring drug prices, the jury may be out for years in gauging the long-term fiscal impact of increased government involvement in the health care system, such as the Affordable Care Act. Overall Medicaid spending by federal, state and local authorities totaled $495.8 billion last year, or 11 percent over the previous year.
Over the coming years the rate of health care spending growth will, appropriately, attract great scrutiny.
“The whole point of giving people insurance is so they have better access to health care, so it shouldn’t be a surprise that health care spending went up a bit as more people got insured”, said Larry Levitt, a senior vice president at the Henry J. Kaiser Family Foundation.
Private health insurance, Medicare, and Medicaid spending growth for prescription drugs all accelerated in 2014, it said.
In addition, it said, “Medicaid spending by the federal government increased 18.4 per cent in 2014”, to $US305 billion, compared with an increase of 6.1 per cent in 2013.
The Times added that the new, highly effective treatments for hepatitis C accounted for $11.3 billion in new spending.
The growth in healthcare spending has returned to a fast gait with the arrival of Obamacare and expensive new drugs.
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The new CMS report sees a large increase in the growth in spending by private health insurance, which covered just under 190 million Americans in 2014, up from 187.7 million the year before. Health care spending represented 17.3% of the country’s GDP in 2013 (Herman, Modern Healthcare, 12/2). The 2.9 percent rise in 2013 was the slowest in the 55 years that the US has studied the figure. Additionally, some of the recent growth is driven by the expansion of insurance coverage. As of that year, 26 states and the District of Columbia had expanded their Medicaid programs as encouraged by the ACA to allow enrollment by almost all poor adults; the remaining states as of 2014 had tougher restrictions on eligibility for the programs.
