Health care spending moderated in 2010, but there is no joy in Mudville yet. Many employers are expecting 6-8% increases for 2012

According to a recent federal report, health care spending rose at only 3.9% in 2010, the lowest rate in several years. The experts say this is probably due to the weak economy. That may be part of it, but this cycle has happened in he past, mainly when there was a national focus on health care costs as when the federal government promoted HMOs as the final solution and during the Clinton health care initiative.

Some of this trend has to do with the turmoil and misinformation about where health care reform is going and whose ox is going to get gored. In times of uncertainty health care providers hunker down to keep a lower profile.

This time things may be much worse when the cycle changes again. Millions more Americans will have coverage under very comprehensive benefits, most will be heavily subsidized for their premium costs, the mentality of “free” services to consumers is stronger because of the Affordable Care Act. In addition, there is pent-up demand that will be released soon after the start of 2014 and perhaps before.

In some cases, especially with employer based coverage, more and more expenses will move to employees because of cost shifting. So while the employer premiums and costs are moderated, that is only part of the story. Keep in mind also that the new mandates within the Affordable Care Act have already added 3% + – to insurance costs. 

Finally, there are the hidden new costs imposed by the Affordable Care Act. New taxes and fees on medical equipment manufacturers, pharmaceutical companies, insurers and employers will eventually find their way into premiums and out of consumer’s pockets.  America may have slowed for the curve, but it has not hit the brakes.

There are some signs of serious efforts to fundamentally change the health care system and the way care is provided and paid for. However, how well patients will accept those changes is unknown, even if they are in their best interest.  Nevertheless, significant positive affects of such changes are years in the future. 

There is no joy in Mudville yet; mighty Casey is still looking for his bat.

Related articles

• NEW DATA: Record Slow Growth In Health Care Costs (thinkprogress.org)
• Recession still affects health-care spending (seattletimes.nwsource.com)
• America hits the brakes on health care spending (msnbc.msn.com)