Health Care Spending on the Rise Again

February 19, 2015

The data is out, and according to some reports health care spending "accelerated significantly in 2014" , as reported in a recent Bloomberg article. Read more: Bloomberg-healthcare spending on the rise

Some are not surprised, and even the government expected an increase due to millions of Americans gaining coverage in 2014. The rate of spending over the last decade had been declining since an all-time high in 2003 with big spikes downward in 2008 and 2009; however it can be argued that when the financial crisis and recession hit, this had more to due with the decrease than curbing healthcare costs. People lost jobs and lost health insurance coverage. Many without insurance might have stayed away from the Dr. or delayed treatments.

When you look at the costs of items being billed, it doesn't appear to be the Dr.'s or hospitals making more money; a large increase in drug costs seems to be one of the culprits. While the ACA law did have some items to control costs (penalizing hospitals that readmit Medicare patients within 30 days of release), there was no major reforms for pharmaceutical companies other than for those covered under Medicare. The law did force drug manufacturers to discount their drugs for seniors who reach the "doughnut hole", now referred to as the coverage gap, and the law will eliminate the doughnut hole by the year 2018.

Time will tell if this increase was a result of more people getting coverage or if costs are truly increasing much faster than inflation and the economy. While some will argue the law is doing a great job to curb the cost of healthcare, the data is indicating otherwise. I think many will agree that there is still a lot of work to be done to make this law better for everyone; let's hope this new Congress can role up their sleeves and work together to fix the problems with the law and do what it was intended to do: make healthcare more Affordable - because an increase from 3.6% in 2013 to 5.6 in 2014 will most likely lead to larger increases in premiums. Giving people money to help pay these premiums should not be the only strategy in making premiums "Affordable". ....and did I mention that the money for the subsidies comes form all Americans paying more in taxes - taxes on insurance companies, taxes which are tacked onto the already very high premiums? Yep, lots of work still left to be done!