Spending to rise in coming years

Those are the numbers that deserve the most attention in thinking about long-term health care spending and whether the country is on a sustainable course, said Tom Getzen, executive director of the global Health Economics Association. It’s the first time the rate would exceed 5% since 2007. At the moment, it has become the largest health insurance program in the nation and is providing coverage for over 71 million low-income people. Health spending was 10 percent of GDP in Canada last year and 11 percent in Germany, according to the Organisation for Economic Co-operation and Development. Prescription drug spending alone increased 12.6% in 2014, the highest growth since 2002. Over the years, Medicare has added coverage for people with disabilities (1972), hospice care (1982), outpatient prescription drugs (2006) and free preventive services (2011). “It is a lifeline for these individuals who would otherwise lack health care coverage”.

Prior to implementation of the Affordable Care Act in 2013, Kentucky’s uninsured rate was 20.4 percent. The actuaries predicted about 78.1 million people will be enrolled in Medicaid by 2024 (Wall Street Journal, 7/28).

The insurance expansion, as well as the price of new hepatitis C medicines that were introduced last year, contributed to a projected rise of 5.5 percent in 2014 in healthcare spending, the study found.

A report released yesterday estimating that the growth in national health spending has accelerated renders the link even weaker still. On the other hand, more Medicare spending on that older population will result in an inflow of resources into the state.

These trends are in contrast to the declining health costs that began with the recession and continued through the weak recovery through 2013.

The effects of expanded coverage won’t be as dramatic in the years ahead, the report said. “That’s really the problem”, said Getzen, who recently wrote an analysis of CMS spending projections. Health care costs appear to be accelerating again, the government said.

That’s because many employer-sponsored and Obamacare plans have high deductibles, which is curbing enrollees’ use of their coverage. In addition, improved price transparency and smaller provider networks could help to lower health care costs.

Health care spending will outpace the nation’s overall economic growth over the next decade, the government forecast on Tuesday. “It critically depends on how the economy grows” (Herman, Modern Healthcare, 7/28).

“This is very consistent with what health policy experts predicted”, said Dr. John Rowe, a health policy professor at the Columbia University’s Mailman School of Public Health in New York.

Even so, the report is “not great news”, economist Douglas Holtz-Eakin, president of the American Action Forum, told the Associated Press.

The state’s insurance exchange is part of the federal Affordable Care Act, also known as “Obamacare”, which requires almost all Americans to have health insurance or face a financial penalty.