Due in part to a vast expansion in coverage to begin in 2014, the actuaries said U.S. healthcare spending would consume 20 percent of the economy by 2019. That would be a rise from $2.6 trillion this year to $4.5 trillion in 2019, about the same projection that was made before the law was passed.
The new projections take into account paying for continued delays in Medicare cuts in physician fees and implementation of the so-called “Cadillac tax” against high-cost plans, which is expected to increase out-of-pocket expenses by a 9 percent in 2018-2019. In addition, CMS actuaries said the law would move 30 million people into insurance exchanges created by the law, substantially more than the 24 million previously projected by the Congressional Budget Office.
The actuaries said the law’s early provisions would increase overall health-care spending by $10.2 billion through 2013. The changes include allowing children to stay on their parents’ insurance plans until age 26 and setting up new high-risk insurance pools.
Healthcare spending would rise 9.2 percent in 2014, up from a previously projected 6.6 percent, due to expanding insurance coverage to 32 million Americans and other changes. The report estimates 92.7 percent of U.S. residents will have health insurance by 2019, up from 84 percent this year. After the 2014 expansion, healthcare spending would slow to 6.7 percent a year in 2015 and 2019.
Out-of-pocket spending for health insurance would fall sharply in 2014 due to new tax credits and an expanded Medicaid coverage start, but it rise again in 2018 when the Cadillac tax starts and insurers make up for it by reducing their plan benefits to stay below the tax threshold.
Read the Wall Street Journal report on healthcare spending.
Read more on healthcare spending.
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