U.S. government scales back Obamacare impact for 2014

WASHINGTON Wed Sep 18, 2013 4:02pm EDT

Supporters of the Affordable Healthcare Act celebrate in front of the Supreme Court after the court upheld the legality of the law in Washington June 28, 2012. REUTERS/Joshua Roberts

Supporters of the Affordable Healthcare Act celebrate in front of the Supreme Court after the court upheld the legality of the law in Washington June 28, 2012.

Credit: Reuters/Joshua Roberts

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WASHINGTON (Reuters) - The U.S. government on Wednesday scaled back its projections for Obamacare's impact in 2014, saying the law would generate slower healthcare spending growth and provide coverage to only half as many of America's uninsured as anticipated last year.

The biggest factor in the change stems from the U.S. Supreme Court verdict last year allowing each state to decide whether to expand the public Medicaid program for the poor under President Barack Obama's healthcare reform law. Republican leaders in nearly half of the nation's 50 states have rejected the expansion.

The U.S. Department of Health and Human Services now expects 11 million uninsured Americans to obtain coverage next year, down from about 22 million projected a year ago, according to the report, which appeared in the journal Health Affairs. It said healthcare spending would rise 6.1 percent in 2014, partly due to the implementation of Obamacare, compared with a previous projection of an increase of 7.4 percent.

The new report estimates that Medicaid enrollment will increase by 8.7 million people in 2014, nearly all as a result of the Obamacare expansion. Last year, analysts projected that about 20 million people would gain coverage through the expansion alone.

"For the states that do expand, we're expecting that some will elect to expand their Medicaid programs after 2014," said Gigi Cuckler, an economist with the Centers for Medicare and Medicaid Services, the HHS agency that produced the report.

Cuckler and her colleagues also projected slightly slower spending growth among the newly insured who obtain private coverage, including those who enter new online state health insurance marketplaces that are due to begin enrolling people in subsidized coverage in less than two weeks.

The latest HHS report said 2.9 million uninsured Americans would gain private coverage next year through employers, the individual market and the new marketplaces. The Congressional Budget Office has forecast 7 million enrollees for the marketplaces alone, but that number includes people who currently have insurance and may switch to the new exchanges.

The projected spending increase would nudge the sprawling U.S. healthcare system to just over $3 trillion in total spending for 2014, representing a cost of $9,697 for every man, woman and child, or 18.3 percent of the U.S. economy. New insurance beneficiaries are expected to be "younger and healthier" and spend more of their healthcare dollars on prescription drugs and physician services rather than hospitals, the report said.

Over the longer term, the report said healthcare spending growth would accelerate to 6.5 percent by 2022, when the industry would hit the $5 trillion mark and represent 19.9 percent of gross domestic product.

Obamacare's contribution to spending is expected to diminish after 2015 as retiring baby boomers shift the momentum toward the Medicare program for the elderly and disabled.

Annual healthcare spending growth is expected to average 5.8 percent for the decade, or about 1 percent above GDP, and below historic growth rates that reached nearly 12 percent in the 1990s.

Obamacare, which will account for more than two-thirds of next year's spending increase, is expected to add only 0.1 percent to average spending growth over the decade or $621 billion in cumulative spending, the report said.

(Editing by James Dalgleish)

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Comments (18)
Poneros wrote:
“Republican leaders in nearly half of the nation’s 50 states have rejected the expansion”.

Republicans – “Your not poor, you are just looking for handouts”.

Sep 18, 2013 4:27pm EDT  --  Report as abuse
flashrooster wrote:
“Republican leaders in nearly half of the nation’s 50 states have rejected the expansion.”
The United States is the only developed country with enough stupid people to allow politicians to get away with this. Why do Republicans care more about stopping Americans from having access to affordable healthcare than anything else? It’s so anti-American. You can see the hatred dripping from their lips.

Imagine for a moment that the Affordable Care Act was the law of the land BEFORE Obama became President. Then Obama gets elected and passes a healthcare “reform” bill that would do away with the Affordable Care Act. Obama would end state-run insurance exchanges that encourage competition and make shopping for insurance much easier for Americans. The new Obama bill would also allow insurance companies to drop clients or raise their rates when they get a serious illness or have an accident, doing away with consumer protections. The new Obama bill would further erode consumer protections by allowing insurance companies to refuse insurance to Americans with preexisting conditions, making it impossible for those people to find affordable insurance. The new Obama bill would also end subsidies to Americans who couldn’t otherwise affordable insurance throwing millions of Americans into the ranks of the uninsured, causing people to have to clog up ERs for all of their doctor needs, a gross waste of money and manpower. It would also force millions of Americans who can’t afford their healthcare into bankruptcy, over a million a year. The new Obama bill would also force many parents with college age kids to drop their kids from their insurance, which can be devastating if your kid is attending college.

If Obama did this, the country would be up in arms. The obvious question would be: why? It would also end up costing tax payers more and the numbers of uninsured would skyrocket. We’d become the laughing stock of the world. Everyone would be asking: why? Lawmakers and the public would be really upset and would demand answers. Why? Why do all these terrible things to American citizens and our healthcare system? Why make our healthcare system worse? The only answer there could possibly be is that the healthcare industry wanted it that way. They don’t want the responsibility of having to insure all Americans. People would probably call for Obama’s impeachment.

The sad thing is, this is exactly what the Republicans have putting most of their energy trying to do. Why? Why are the Republicans so against the American people? Why are people so stupid as to vote for these Republicans, with their stupid healthcare plans for the rest of us. Keep in mind that they have no problem accepting free government supplied healthcare. It’s okay for them, but not for anyone else.

Sep 18, 2013 4:44pm EDT  --  Report as abuse
CecilNixxon wrote:
Obamacare will bring back unions in full force. Already businesses are giddy with the prospect of dumping their employee health insurance obligations, and multi-state stonewalling of the exchanges are going to drag the implementation down.

When all employees are essentially “freelancers” they will look to the unions as the organizations that can provide health insurance at attractively bargained-for rates (in comparison to the exchanges – I have no confidence they will allow competition to erode their profits). Expect unions to grow – first the SEIU will capture an ever-growing number of service and tech workers. When enough critical mass has been achieved, Big Business will rue the day they turned their backs on loyal employees.

Sep 18, 2013 4:48pm EDT  --  Report as abuse
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