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“Upon Further Review”

July 29, 2011

Yesterday, the White House attempted to portray a report in Health Affairs authored by economists and actuaries from the Centers for Medicare and Medicaid Services (CMS) as proof that the Democrats’ health care law will bring down costs and reduce spending.  But upon further review, the facts suggest otherwise.  This is the first annual report on national health spending since the Democrats’ health care overhaul became law.  The report exposes a reality that so many other reports have already warned about – health care costs and spending will go up, employers will drop health coverage and the government will control a greater portion of our health care system, all because of the Democrats’ health care law.  The report’s facts are clear:

The Democrats’ Health Care Law Will Increase Private Health Insurance Premiums

“In 2014, growth in private health insurance premiums is expected to accelerate to 9.4 percent, 4.4 percent higher than” if the Democrats’ law hadn’t been enacted. (p.9)

Employers Will Drop Coverage for Their Employees

From 2015-2020, “growth in private health insurance premiums is expected to slow somewhat,” primarily because some employers “will stop offering health coverage.” (p.9)
The year the Democrats’ health care overhaul was signed into law, 5.1 million Americans lost their employer-sponsored health coverage. (p.2, p.8)
Once the Democrats’ health care law ramps up (2015-2020), this trend will continue as “large employers are expected to discontinue offering health insurance to their workers.” (p.5)

Democrats’ Prescription for Rising Health Care Costs:  Spend More Money!

In 2014 alone, the Democrats’ health care law will increase spending on hospital care by $8.6 billion, on physician services by $17.8 billion, and on prescription drugs by $15.8 billion more than if the law had never been enacted. (pp.6-7)
National health spending will increase 80% by 2020, from $2.58 trillion in 2010 to $4.64 trillion in 2020. (p.2, p.8)
The national health expenditure growth rate is expected to skyrocket when the Democrats’ health care law’s coverage expansions start, from 5.5% in 2012 to 8.3% in 2014, driven by a 20.3% increase in Medicaid spending. (p.3)
Despite claims that their law would slow the rate of health care spending, national health expenditures are still growing faster than GDP and will grow from 17.6% of GDP in 2009 to 19.8 percent in 2020.  (p.1)

Government Takeover of Health Care Becomes More of a Reality

“As the major coverage expansions of the [Democrats’ health care overhaul] are implemented in 2014, health care financing is anticipated to further shift toward governments…By 2020, government health care spending is projected to be 49 percent of national health spending…reaching a total of $2.3 trillion.” (p.10)
“As the government share of spending rises, the projected share for private businesses declines.” (p.11)