Govt:Spending to Rise with Health Plan 09/09 05:42

   The nation's health care tab will go up -- not down -- as a result of 
President Barack Obama's sweeping overhaul. That's the conclusion of a 
government forecast released Thursday, which also finds the increase will be 
modest.

   WASHINGTON (AP) -- The nation's health care tab will go up --- not down --- 
as a result of President Barack Obama's sweeping overhaul. That's the 
conclusion of a government forecast released Thursday, which also finds the 
increase will be modest.

   The average annual growth in health care spending will be just two-tenths of 
1 percentage point higher through 2019 with Obama's remake, said the analysis. 
And that's with more than 32 million uninsured gaining coverage because of the 
new law.

   "The impact is moderate," said economist Andrea Sisko of Medicare's Office 
of the Actuary, the nonpartisan unit that prepared the report.

   Factoring in the law, Americans will spend an average of $13,652 per person 
a year on health care in 2019, according to the actuary's office. Without the 
law, the corresponding number would be $13,387.

   That works out to $265 more with the overhaul. Currently, Americans spend 
$8,389 a year per person on health care.

   The new bottom line is guaranteed to provide ammunition for both sides of a 
health care debate that refuses to move offstage. Republicans are vowing repeal 
if they win control of Congress this fall, although they are unlikely to have 
enough votes to override an Obama veto.

   For critics, the numbers show that the law didn't solve the cost problem, 
although Obama repeatedly said he wanted to bend the spending curve down.

   The analysis found that health care spending will grow to nearly 20 percent 
of the economy in 2019. That siphons off resources that could be invested in 
education, research, transportation or other areas. Medical costs now account 
for about 17 percent of the economy, and some experts think that's already too 
much.

   For advocates of the law, the numbers show that expanding coverage to 93 
percent of eligible Americans comes at a relative bargain price. Moreover, if 
Congress sticks to cost controls in the legislation, there's potential beyond 
2020 to rein in the growth of health care spending. The new projections show a 
slowdown starting around 2018.

   "By the end of the projection period, we estimate (costs) will grow more 
slowly," said John Poisal, who worked on the forecast.

   It's a long way off, but under the health care law, the big coverage push 
doesn't start until 2014.

   That's when the government will offer tax credits to help middle-class 
people buy private coverage through new insurance markets in their states. At 
the same time, Medicaid will be opened up to millions more low-income people. 
Insurers will have to accept all applicants, regardless of health problems. And 
most Americans will be required to carry coverage or face a fine from the IRS.

   The study also showed:

   ---Government is becoming the dominant player in health care even without 
Obama's law. Federal, state and local government spending will overtake private 
sources in 2011, three years before the main provisions of the overhaul take 
effect. The biggest programs are Medicare and Medicaid.

   ---Even after the health care overhaul is fully phased in, three out of five 
people under age 65 will still have private coverage, with most continuing to 
get benefits through their employer.

   ---Two federal-state programs, Medicaid and children's health insurance, 
will grow dramatically under the overhaul. Enrollment will jump 34 percent 
between 2013 and 2014, to more than 85 million people. States will be bigger 
players in health care --- and face new pressures over the long run.

   The White House released its own analysis of the report, calculating that 
total health care spending per insured person would be more than $1,000 lower 
under the law.

   A White House blog post from health reform director Nancy-Ann DeParle said 
that by 2019 overall health care spending per insured person would average 
$14,720 under the law, compared with $16,120 if Congress and the president had 
not acted, or $1,400 less.

   The White House average was not part of the Medicare analysts' projections, 
and there was no official response from the actuaries to the White House 
estimate.DeParle acknowledged that spending would rise in the short run as 
uninsured people gain coverage, but noted the rate of growth would slow in the 
second half of the decade. "A close look at this report's data suggest that for 
average Americans, the Affordable Care Act will live up to its promise," she 
said.

   The Medicare analysts' report is available online from the journal Health 
Affairs.


(KA)