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Report predicts rising health costs under Obama law

- The Washington Times - Tuesday, June 12, 2012

The U.S. will spend slightly more on health care over the next decade than it would have had President Obama's Affordable Care Act not passed, according to a new estimate released Tuesday by the federal government.

If the Supreme Court upholds the law later this month, the Affordable Care Act is expected to add $478 billion to health care costs over the next decade, driving up average spending by one-10th of a percent faster than if the law had never been passed, according to the Center for Medicare and Medicaid Services, a federal agency within the Department of Health and Human Services.

While Republicans said the data proves the health care law won't solve the problem of ballooning health care costs, the administration defended the law, saying Americans' out-of-pocket expenses will be less beginning in 2014, particularly on prescription drug.

"That's real money back in the pockets of millions of Americans," Secretary of Health and Human Services Kathleen Sebelius said in a blog post defending the law.

Overall, theCenter for Medicare and Medicaid Services said health care spending is expected to continue growing at unusually low levels in the next year because of the slow economic recovery. But spending growth will spike in 2014, jumping from 3.8 percent in 2013 to 7.4 percent in 2014 as major provisions of the law go into effect.

Growth will remain higher for several years, as millions of Americans obtain health coverage with the help of insurance exchanges, federal subsidies and expanded Medicaid programs, and then drop to about 6 percent annually.

By 2021, federal, state and local governments will make up nearly 50 percent of all health spending in the U.S., up from 46 percent in 2011.

Republicans said the report shows Mr. Obama failed to make good on his promise to use his health law to bend the cost curve on health costs as a percentage of the American economy.

"Exploding health care spending is hardly the relief the president promised the American people," said Sen. Orrin G. Hatch, Utah Republican. "Instead of working to address skyrocketing costs and reforming our nation's broken entitlement programs, the president opted to jam through a partisan government takeover of health care."

The projections have changed little from last summer, when the Center for Medicare and Medicaid Services first projected that the Affordable Care Act would drive health care spending up slightly in the next decade.

The administration shrugged off the data, saying the law only appeared to raise spending because it was measured against unusually low recent growth rates during the economic recession.

Key provisions in Mr. Obama's health care law - bringing more healthy Americans into insurance pools, allowing Medicare to experiment with new "bundled payment" methods and cutting down on emergency room visits by mandating coverage for everyone - could help control spending further.

Still to be seen is whether that does enough to bend the cost curve in future decades.

The newly insured population will be younger and healthier than those currently insured, and they're expected to drive up the demand for prescription drugs and doctors.

That could be a good sign for reducing spending in the long term, because patients who regularly visit the doctor and practice preventative medicine can avoid more expensive health problems in the future.

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