Health care costs rise at slowest rate in 50 years
Source: USA Today
Health care costs rise at slowest rate in 50 years
Kelly Kennedy, USA TODAY 4:58 p.m. EDT July 29, 2013
WASHINGTON Personal health care costs rose last year at the slowest rate in the last 50 years, the White House announced Monday, citing statistics aimed at bolstering the case for the 2010 health care law.
The 1.1% increase in personal consumption spending over the 12 months ending in May was due to decreases in hospital and nursing home services, according to a statement from Alan Krueger, chairman of the White House Council of Economic Advisers. Hospital readmissions rates dropped from an average of 19% to 17.9% for Medicare patients since the passage of the 2010 health care law, Krueger said.
The law is not affecting job growth, Krueger said. Job growth in industries that have traditionally not provided health insurance for their employees, such as restaurants, was higher. Restaurant sales and employment have increased more than any other retail sales industry since the law was signed, at about 11% for employment and 17% in retail sales, and weekly hours also have grown about 3% since the law was signed.
The announcement came after President Obama told The New York Times this weekend that support would come as the 2010 health care law is implemented, a hope that Americans will like the law's benefits when they take effect.
Read more: http://www.usatoday.com/story/news/politics/2013/07/29/administration-lowered-premiums-white-house/2596453/
99th_Monkey
(19,326 posts)oh wait. This is a good thing? never mind.
NoOneMan
(4,795 posts)It may have nothing to do with the health care law and more to do with economic conditions and self-rationing of services (that was the theory being put forth last year I believe). I'm not even sure its saying the growth in costs per service has declined.
BlueStreak
(8,377 posts)I listened to that for two years when we saw the costs rise only 3%, following more than a decade where the annual increases were about 15% every year. Maybe there was some self rationing after the Bush meltdown, but you can't use that argument for 3 years. Unemployment is coming down, so anybody who put off medical expenses and now has health coverage would be expected to bounce back up to their prior level, and the data shows none of that.
What everybody seems to keep forgetting is that EARLY ON -- 2 years ago now -- the provision went into effect that 85% of the premiums on group policies (80% in the case of individual policies) had to go toward actual health care, or else the company had to rebate the excessive premiums.
That took away much of the incentive to jack up premiums. Why jack up premiums if you will just have to go through a rebate cycle? It is better marketing to set the premium more competitively and win more of the business.
That alone can account for most of the change.
Yo_Mama
(8,303 posts)First, the income effect of the 2007-2009 recession hasn't abated at all. It is still with us, with median real household incomes being significantly lower than they were in 2000.
http://advisorperspectives.com/dshort/updates/Median-Household-Income-Update.php
Copays for most people have increased, insurance coverage has dropped, and even people with insurance are using significantly less services, on average, because they are strapped.
Premium costs don't have much of a factor, because the article is referring to the amount of services actually being delivered.
We'll have to wait for a couple of years, maybe three now since the employer mandate isn't going to be implemented until 2015, if ever, to see what happens as ACA is implemented. If insurance coverage increases but people still can't afford the copays, they still will use less services.
I looked at the CA silver exchange coverage, and the copays on it are high enough that many lower-income people simply won't be able to afford medical services. One ear or urinary tract infection, treated at the normal standard of care, could wind up cost them $200-$300 dollars. Furthermore, I don't think they are going to get access to doctors, because the copays on sick visits are the vast majority of the cost, so I don't think doctors will be able to treat many of them. They are still going to have to use community clinics or the ER.
It does seem to me that premiums are too high for the amount of care being delivered, and I am waiting to see what happens to insurance rates next.
BlueStreak
(8,377 posts)We know for certain that the economy is in better shape than it was 3 years ago -- MUCH better shape. Yes, there are still plenty of people struggling. I'm not trying to deny that. But I am simply pointing out that if the primary cause of this phenomenal drop from ~15% to 3% was personal economics, then the 3% number could not possibly hold as the economy improves. If your argument were correct, that 3% would have to be pushing back toward the 15%, yet we see no movement whatsoever.
The main cause, I believe, is that ACA capped the profit/overhead margins at 15%. That is a huge change that people rarely talk about. It probably makes more difference than the exchanges that everybody is talking about. After all, the exchanges affect a tiny fraction of policies. The cap on profit/overhead affects every single policy in this country.
If we return to a price spiral of, say, 6-9% next year, that will give some credence to your argument. If it stays at 3% or below, I think we really have to look at other factors like the profit/overhead cap being the dominant forces.
Yo_Mama
(8,303 posts)That's the major mechanism. The drop in incomes is forcing consumers to avoid a lot of medical services. Also insurance copayments have increased, and many people don't have any health insurance, so it's a double whammy.
obama2terms
(563 posts)I'm starting to really like Obamacare, I just got another rebate check in the mail last week. I like this whole they can't screw you out of your money thing.
Drunken Irishman
(34,857 posts)underpants
(182,829 posts)yes they rose but they rose less than last year.
We live in a media bubble. We can never get the full equation....like "What is the shelf life of (insert WMD)?"
area51
(11,910 posts)Just think of how much slower costs would rise if we actually transitioned to a sane system like single-payer.
riqster
(13,986 posts)The ACA is a good incremental step, but we need to GOTFV in 2014/2016 to go further.
BainsBane
(53,035 posts)by a fair bit.
Kingofalldems
(38,458 posts)BainsBane
(53,035 posts)Stuart G
(38,436 posts)Rosa Luxemburg
(28,627 posts)it's worth the money becuase the media won't tell the public this.