August 23, 2014

Amid Uncertainty, Projections Show Health Reform Legislation Will Slightly Raise Spending Over Next Decade

  • The American health care system is a patchwork of public and private programs that serve citizens in different ways, depending on their age, military...

Updated estimates by a federal agency indicate that spending on health care will rise from 17.3 percent of GDP last year to 19.3 percent in 2019 -- 0.3 percent higher as a result of this year’s health reform legislation and a few other changes.

According to the Center for Medicare and Medicaid Services (CMS), by 2019 about 32.5 million more individuals will have health insurance. That would be nearly 93 percent of the population, compared to 83 percent before the legislation.

Concord Coalition Policy Director Joshua Gordon notes in a new blog post, however, that the report doesn’t offer hard numbers on the growth of health care costs over the long term. The recent Medicare trustees report, though, suggests that the cost-control efforts in new legislation could gradually produce modest savings.

But both CMS and the trustees note tremendous uncertainty in coming to any conclusions on overall health care costs -- especially over the long term -- from such a complex piece of legislation. What is also clear, Gordon says, is that the relatively benign projections on the cost of the reform legislation will depend on Congress sticking to the cost controls that were built into it.