Govt: ACA causes healthcare spending to soar


Healthcare spending soared in the last three months as millions of people obtained coverage under the Affordable Care Act, according to a report the Bureau of Economic Analysis announced Wednesday.

The 9.9 percent rise in health spending--the largest spike since 1980--was largely driven by more use of health services, prescriptions for higher-priced drugs and elective surgeries, Bloomberg reported.

"The sharp increase in estimated utilization appears to have been driven by greater use of healthcare services by people who gained insurance coverage during the first quarter because of the Affordable Care Act," Jason Furman, chairman of the Council of Economic Advisers, wrote yesterday in a White House blog post.

Although the report only includes health insurance exchange enrollments through mid-February, some industry experts agree with the federal government's conclusions.

"It's still pretty early for most of those newly insured to access a whole lot of healthcare services, but some of them definitely are," Ceci Connolly, managing director of PricewaterhouseCoopers Health Research Institute, told Bloomberg. "This is definitely an increase in utilization, it appears, more than pricing."

Furman also sought to quash any concerns that the surge in sign-ups toward the end of the exchange enrollment period would have on increased spending. "Any upward pressure on healthcare spending growth from expanding insurance coverage will cease once coverage stabilizes at its new, higher level, so it does not affect the longer-term outlook for spending growth," he said.

Indeed, some experts have predicted medical spending will grow faster than the economy during the next 20 years.

To learn more:
- here's the BEA announcement (.pdf)
- read the White House blog post
- see the Bloomberg article

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