I will resist, unsuccessfully, commenting on these key points about the cost of health care. Suffice to say things are not looking good and to date we have done little to help the situation. As I have been saying for the last two years, health care reform was not much about reforming anything, but rather expanding coverage. That is a prescription for more out of control costs, especially if other changes related to health insurance, health care benefits and the related tax structure drive more and more Americans to the health insurance exchanges in 2014.
Excerpts from an interesting article from Kaiser Health News:
The federal health law, which will expand coverage to 30 million currently uninsured Americans, will have little effect on the nation’s rising health spending in the next decade, a government report said today.
The report by the Medicare Office of the Actuary estimated that health spending will grow by an average of 5.8 percent a year through 2020, compared to 5.7 percent without the health overhaul. With that growth, the nation is expected to spend $4.6 trillion on health care in 2020, nearly double the $2.6 trillion spent last year.
White House Deputy Chief of Staff Nancy-Ann DeParle said the report showed Americans were getting a good deal. “The bottom line from the report is clear: more Americans will get coverage and save money and health expenditure growth will remain virtually the same,” she said on the White House blog. [Talk about spin, remember the idea was to make health care more affordable, not the same]
DeParle, who helped lead the White House efforts on the overhaul, said several delivery system reforms being tested under the health law will work to lower spending. “We know these new provisions will save money for the health care system, even if today’s report doesn’t credit these strategies with reducing costs,” she said. She pointed to new programs that administration officials have said they hope to implement changing the way Medicare and Medicaid pay doctors and hospitals. [and what about the rest of Americans not on these programs and what about shifting of costs to the private sector if these programs are successful]
National health spending in 2010 grew at its slowest rate ever recorded – 3.9 percent – as a result of more Americans forgoing treatment because they had lost their jobs and their health coverage, said the report, which is being published online today by the journal Health Affairs. In 2009, health spending grew by 4 percent. The report estimates that spending on health care will accelerate this year because the economy is expected to improve and people would have more disposable income to spend on medical care. [0ops]
In 2014, when the major coverage expansions of the health law begin to take effect, national health spending is expected to grow 8.3 percent, according to the new analysis. But spending growth should return to its 6 percent historical average from 2015 to 2020 as some employers drop coverage and the so called “Cadillac tax” on high-cost insurance plans takes effect in 2018. “The effect is likely to be a slowdown in the growth of health services, health insurance premiums and health spending overall,” the study said. [think about that for a second, employers drop coverage and high cost plans must lower the benefits to avoid the new tax; do you see that as a positive thing that addresses the basic health care system problems? ]
Meredith Rosenthal, a health economist at Harvard School of Public Health, said it is difficult to predict what impact the health law will have on slowing national health spending. “Many of the components of the law that are intended to control costs are still in draft form,” she said citing experiments such as accountable care organizations and bundled payments that change how Medicare pays providers. [the understatement of the year, but wait, are we talking about health care costs for the average guy or gal in America or just what the government pays for Medicare? ]
The number of Americans with employer-sponsored insurance will grow from 163 million last year to 170 million in 2014, the report estimated. But by 2020 that number is expected to drop to 168 million as a result of two factors: Baby Boomers joining Medicare and employers dropping health coverage for workers. Most of those workers would turn to new state insurance exchanges – or marketplaces –or Medicaid, the federal-state health program for low-income and disabled people. [employer coverage will grow in these economic times only to have employers drop coverage to take advantage of the exchanges, sounds fishy to me, but also have they considered that employers are now on a quest to reduce the coverage that is in effect by raising all aspects of cost sharing?]
The issue over how many employers would stop offering coverage has been a political flash point since the health law was approved in March 2010. Democrats maintain most employers would continue to provide coverage, but Republicans and other critics predict many companies would drop it because their workers will be able to go to new health exchanges. Starting in 2014, the health law requires all employers with 50 or more workers to provide coverage or pay a fine.
The Congressional Budget Office — the neutral scorekeeper — estimates that, by the end of the decade, 3 million fewer people will get health insurance from their employer. That’s slightly more than the Office of Actuary prediction. The study authors stressed their projections could vary depending on many factors, including the overall state of the economy and how quickly people sign up for new coverage. “These projections are definitely uncertain and that increases as we move along in the projection period,” said Sean Keehan, a study author and an economist in the Office of the Actuary. [ah, that’s more like it]
The office also predicted last year about 375,000 people would sign up for new Pre-existing Condition Insurance Plans by 2013. But since the plans began a year ago under the health law, only about 20,000 people have signed up. [do we have a solution looking for a problem? I remember during the debate being lambasted by supporters praising health care reform because those who were prevented from doing so would now have the coverage available – but it’s still not affordable ] CMS Chief Actuary Rick Foster attributed the lack of public awareness of the new insurance pools for the less-than-anticipated participation. He said his office took into account the low participation rates in making estimates for enrollment in Medicaid and insurance exchanges starting in 2014.
The report estimated about 13.9 million people would enroll in new state-based insurance exchanges in 2014 and the number of uninsured would drop by nearly 20 million in that year. Given how many millions of eligible people don’t sign up today for Medicaid, that prediction is highly speculative, said Steven Findlay, an analyst at Consumers Union.
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