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.