CMS Report Shows Government Health Care “Doing Fine”
This afternoon, officials from the CMS Office of the Actuary released their annual projections for health care spending in the coming decade. A review of the report indicates that, even as President Obama claimed on Friday the private sector was “doing fine,” government health care spending is REALLY doing fine – as thanks to the billions in new spending on Obamacare, government health programs are on a glidepath to becoming the majority of all health care spending:
- Overall health care spending is projected to rise to 19.6% of the economy by 2021, up from 17.9% of GDP in 2010.
- Government-sponsored health care spending will approach half (49.6%) of all health spending by 2021, up from just under 46 percent in 2010.
- Obamacare is projected “to add about $478 billion in cumulative health spending” from 2014 through 2021.
- Medicaid spending – already growing at a 6.3 percent rate in 2011, well above the entire health sector – will grow by 18 percent in 2014, thanks to Obamacare.
- Medicaid will contain 85 million enrollees by 2021, according to the report, and will consume 20% of all health spending, up from 15.5% in 2010.
- Overall health spending will rise by 7.4 percent in 2014, compared to 5.3 percent in the absence of Obamacare. Health insurance, drug, physician, and hospital spending will all rise more quickly thanks to the law.
- According to the report, “some large employers with low-wage employees are expected to discontinue health insurance benefits for their employees and to instead pay the penalty” associated with dumping their workers on to Obamacare’s Exchanges.
- The actuary’s report also notes that health insurance spending on a per-enrollee basis will RISE in 2014, not fall, because “people who are eligible for available government subsidies are expected to…enroll in plans that are more generous than those they had previously joined.” In other words, by subsidizing people to buy richer insurance policies, Obamacare is raising costs, not lowering them.
The actuary’s report also confirms that – contrary to the President’s assertions – the private sector is NOT doing fine, and that the economic downturn continues to affect the health care sector. Specifically, health spending in 2011 rose by a comparatively small amount due to the “lingering effects of the recent recession and modest recovery,” as high unemployment and stagnant wages often result in financially strapped individuals putting off elective surgeries and trips to the doctor. Just as prior studies from the non-partisan actuary have concluded, spending growth was slower than projected NOT because Obamacare worked, but because the Obama “stimulus” didn’t.
The overall picture presented by the actuary’s report is bleak. In the short term, the effects of President Obama’s failed economic policies echo throughout the American health care system. In the longer term, Obamacare’s massive infusion of new federal spending will only serve to accelerate the fiscal insolvency caused by our existing unsustainable entitlements. Some would argue that under either measure, American health care is NOT doing fine.