New US reforms are poised to dramatically shift the nation’s healthcare spending, not only curbing Medicare costs but also pumping more money toward the private sector as roughly 32 million people gain coverage.
Although the law has little impact on overall healthcare spending, government researchers said they expect sharp changes in the US healthcare sector as the bulk of the recently passed law starts taking effect in 2014.
The survey, conducted by Centers for Medicare and Medicaid Services (CMS) auditors and released yesterday, is likely to fuel the debate over whether the reform law truly reins in healthcare spending, now already more than one-sixth of the nation’s economy.
“The overall net impact is moderate,” said Andrea Sisko, a CMS actuary who helped analyze the data.
The analysis comes just weeks ahead of US elections seen largely as a referendum on Democrats, who control both the White House and Congress. Reforming the nation’s healthcare system was a top domestic priority for the administration of US President Barack Obama, but Republicans have vowed to repeal the law or cut funding if they win enough congressional seats.
CMS’ study, published in the journal Health Affairs, updates the agency’s earlier analysis from February, this time taking into account final details in the healthcare reform law passed in late March.
Factors contributing to lower costs include reduced payments for most Medicare services and doctor visits as well as cuts to private Medicare Advantage insurance plans, although a provision to cover more of Medicare patients’ drugs will increase spending.
In addition, millions of people are expected to gain health insurance.
By 2019, nearly 93 percent of the US population should have coverage, researchers said. Now, more than 40 million people lack insurance, but that figure would drop by 32.5 million, the study found.
“There’s definitely going to be a larger demand for services in 2014,” said John Poisal, deputy director for CMS’s National Health Statistics Group that made the projections.
That year is when the bulk of the health reforms take effect, including a provision that requires US citizens to buy health insurance or face fines.
Most uninsured will gain coverage through expanded joint federal-state Medicaid programs for the poor or on their own through state-based exchanges.
Nearly 16 million people will buy health insurance from private companies through the exchanges in 2014, growing to more than 30 million by 2019, the study showed.
Despite the underlying shifts, however, US healthcare costs will continue to rise considerably, reaching US$4.6 trillion by 2019 from US$2.6 trillion this year.
That amounts to 19.6 percent of GDP. Healthcare is already expected to reach 17.5 percent of GDP this year.
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