Health Care Affordability is in the Eye of the Beholder

By Max Friedmanc313485_s

Are your health care bills going down?  Statistically, they should be.

Even with the implementation of the Affordable Care Act (ACA), many families find it difficult to afford health insurance or to afford using their insurance, due to high deductibles, co-pays and stagnant incomes.  Yet, the news about health care costs in the economy as a whole, appears to be good.

According to a study by the Centers of Medicare and Medicaid Services (CMS) released last week, health care spending in 2013 in the United States grew at its lowest rate since the government began tracking it in 1960.  The study, published in HealthAffairs, a health policy journal, shows that 2013 was the fifth straight year of very small increases in health spending, growing 3.6% from 2012, to $2.9 trillion total.

The Upshot blog at the New York Times discusses the good sides of the decline in health care spending growth, noting that the prices of medical services are growing at less than overall inflation and hospitalizations have gone down.  Medicare spending, private health insurance, and individual out-of-pocket expenses also declined, suggesting system-wide savings.  Some areas did see increased spending, including Medicaid and prescription drug spending, which had been low for years.  But if the overall health care cost curve can remain at stable growth levels, then health care spending will not crowd out other crucial portions of the economy, like education.

While some at CMS note that the recent trend is consistent with known patterns of reduced spending during and after recessions, David Leonhardt of the New York Times Upshot blog notes that the trend seems to match the timing of recent reforms implemented under the Affordable Care Act (ACA).  And Sarah Kliff at Vox reports that forecasters say that health spending will grow at a slower pace in the next decade than it did in the 1990s and 2000s, even as millions more Americans gain access to health insurance.  Kliff notes that if this trend holds, we are entering the “pay less, get more” era of health care.

But a negative reason for the slowing of growth could be that individuals and families forced into high-deductible health plans spend less on health care, and could be delaying or avoiding necessary care due to tight family budgets.  So, while it is good news that health care costs are growing more slowly, this important trend may be meaningless to people if their own experience is higher premiums, co-pays and deductibles.

So, even if health care costs are more under control, there is much work left to do to make sure people can tell.

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