National health spending is expected to grow by at least 8.3 percent in 2014 when much of President Obama’s health care law is implemented according to a new report by government analysts published in Health Affairs. After growing only 4.9 percent between 2011 and 2013, health spending will soar as millions Americans are either added onto Medicaid or start receiving subsidized insurance through the health exchanges.
Virtually every type of health care spending will grow faster under Obamacare than it would have otherwise without the new law. Hospital spending will grow 1 percentage point faster, physician services 3.1 points faster, and prescription drug spending 5.1 points faster. Only out-of-pocket spending is projected to decrease in 2014 (by 1.3 percent).
Looking past 2014, the government’s share of health care financing is expected to reach almost 50 percent by 2020. Today government finances only 45 percent of all health care spending. The government’s share of health care financing, and the rate of national health spending growth, will be much higher if Congress does not follow through with scheduled cuts to Medicare.
Last December Congress prevented Medicare reimbursement rates to doctors from being cut by almost 30 percent. Those cuts are again scheduled to take place January 2012. If Congress, again, prevents these cuts from occurring, Medicare spending is set to grow by 6.6 percent in 2012 compared to the scheduled 1.2 percent.