Economics, Health Care

The slowdown in health spending is not due to Obamacare

Image Credit: Shutterstock

Image Credit: Shutterstock

You probably didn’t notice it in your health insurance premiums, but health care costs have been slowing down for the past decade. And the White House is trying to take credit for it. Don’t believe it.

The rate of growth of health spending has slowed remarkably over the last decade. But that’s small consolation for anyone who pays for health insurance.

For the past 50 years, spending for health care has grown faster than the economy. In 1965, health spending was 6% of GDP.  Today, it is about 18%, and it is still rising.

Something happened to make runaway health spending slow down. In 2002, that spending grew 9.7% a year. By 2009, the growth rate fell to 3.9% a year — and did not change for 3 years.

That does not mean health care became cheaper. A lower rate of growth means that costs are still rising, just not as quickly as in the past. Health spending in the US averaged $5,695 per person in 2002 and climbed to $8,680 by 2011. Maybe that’s why no one noticed.

Even so, any sign that the growth in health spending is slowing would seem to be good news. But that depends on why the slowdown occurred.

Despite what the White House wants us to believe, Obamacare had nothing to do with it. Health reform wasn’t even signed into law until 2010, well after health spending growth had dropped.

In the immortal words of James Carville, it’s the economy, stupid. Millions of people lost their jobs during the deep recession that ended in 2009, and many of them still don’t have work. Without a job and the health insurance that comes with it, it’s difficult to pay for health care. No wonder health spending slowed down.

Don’t wait around for the White House to explain that to the voters.

One thought on “The slowdown in health spending is not due to Obamacare

  1. Obama’s talent is in maneuvering, campaigning, talking, being the voice or agitation in the name of unity, for taking credit for things beyond his control………whimsical

    Don’t worry it’s right around the corner, then carvilled will be bitching about “profits” and “ceo’s” again in the other direction. He’ll demand that we need more control.

    remember back in april of 2009 just one month after the democare bill was passed? Yeah they tried to endrun a PRICE FIX SCHEME………after telling them that “costs” would be reduced. But for anyone that watched the HEALTH CARE SUMMIT (and i did for all six hours), obama admitted from his mouth that premiums would go up atleast 11%, and you know what that actually means when a politician (and even worse an idealist), tells you you’ll pay more…………………….just multiply that by 3 or 4.

    When obama speaks of “costs” what HE REALLY MEANS is 15% gdp spent on health care. His whole angle is a “species” theme, if anyone still follows marx, or “the great society” theme currently, then one understands what they mean when they say “better health care for all”. Consider that there are billionaires millionaires or folks that just know folks, that already get the best………..So when they say “better health care for all”….what they mean is merely spreading that 15% around. THAT’S IT……….STATISTICAL, in order to prove “equality” or “fairness”.

    probably not the right page for most of this. But once folks talk about gdp%, nations, then society and species has to follow.

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