Amid reports of rising health care costs. President Barack Obama heralded the success of his health care law, which he said is keeping rates at a lower pace and has been a boon for business.
“One of the reasons our businesses are more competitive is because health care costs have actually stabilized from what we've being seeing in previous years,” Obama told the White House Export Council Thursday. “Just an interesting statistics for folks who may be interested, thanks in part to the Affordable Care Act, known in part as Obamacare, the cost of health care is going up at its slowest rate.”
President Barack Obama delivers remarks at a meeting of his Export Council in the Eisenhower Executive Office Building on Sept. 19, 2013 in Washington, D.C. Obama met with new council members from the hospitality, defense and pharmaceutical industries, where he spoke on the economy in addition to the budget standoff with Congress. (Getty Images)
The National Health Expenditures Report from the Centers for Medicare and Medicaid Services, released Wednesday, found that health rates are growing slower now, but predicted a faster pace.
“Health spending growth through 2013 is expected to remain slow because of the sluggish economic recovery, continued increases in cost-sharing requirements for the privately insured, and slow growth for public programs,” the CMS report stated. “These factors lead to projected growth rates of near 4 percent through 2013. “
The increase will be in part because of Obamacare and anticipated economic growth.
“However, improving economic conditions, combined with the coverage expansions in the Affordable Care Act and the aging of the population, drive faster projected growth in health spending in 2014 and beyond,” the report continued. “Expected growth for 2014 is 6.1 percent, with an average projected growth of 6.2 percent per year thereafter. Over the 2012–22 period, national health spending is projected to grow at an average annual rate of 5.8percent. By 2022 health spending financed by federal, state, and local governments is projected to account for 49percent of national health spending and to reach a total of $2.4 trillion.
Citing the report, Obama said health care cost increases have slowed since the health care law was passed.
“Employer based health care costs are growing at about one-third of the rate of a decade ago,” he said. “Just yesterday, CMS estimated that health care spending grew at its second slowest rate in 2012, will grow at its third slowest rate in 2013 and grew at its slowest rate in 2011. So three years since Obamacare passed, we've seen the slowest growth costs on record.”
“When we passed the Affordable Care Act, there were all kinds of arguments about how the cost savings weren't very meaningful, weren't going to do a lot,” Obama continued. “We weren't really bending the cost curve. Well, it turns out what we've done is starting to bear real fruit and it's having a real impact on the bottom line of American businesses.”
The law has not been helpful to employers and is not responsible for the slow growth of health care costs, said Kevin Kuhlman, manager of legislative affairs for National Federation of Independent Businesses, a small business advocacy group that joined state attorney generals in seeking to overturn Obamacare.
“The real reasons health insurance premiums have continued to increase but at a lower rate are the effects of the recession and the plan management decisions that employers actively controlling costs," Kuhlman told TheBlaze. "Experts believe that when the economy rebounds, health costs will return to their previous growth rates. In fact, changes made in Obamacare could accelerate rate increases due to increased mandates and taxes. So what we really need to consider is what the rates will look like two, three, four years down the road.”
The CMS report states: “By 2022 the Affordable Care Act is projected to reduce number of uninsured by thirty million add approximately 0.1 percent to average annual health spending growth over the full projecting period and increase cumulative health spending by $621 billion.”
A Congressional Budget Office report from Sept. 13 said the federal government’s health care spending "will grow considerably in 2014 because of changes made by the Affordable Care Act: More low-income people will become eligible for Medicaid, and others will become eligible for subsidies for health insurance purchased through exchanges.”