Does today’s report from the Department of Health and Human Services actuaries, estimating that total national spending on health care will rise by 0.9 percent in the first decade under the new health reform law, mean that the law will not control health costs or will cause the deficit to explode? Not at all.
As we and others have noted, health reform will increase national health spending at first because it greatly expands coverage and insured people use more health services than uninsured ones. The new report estimates that the law will reduce the number of uninsured Americans by 34 million.
But health reform will also slow the growth rate of health costs, generating savings that will grow over time. The Congressional Budget Office estimates that by the decade after 2019, the federal government will spend less on health care than it would have without the new law. (The actuaries’ report doesn’t provide spending estimates past 2019.)
As for the deficit, the actuaries’ report doesn’t address the issue; it covers the law’s impact on spending but doesn’t include many of the provisions that will raise revenues. But CBO estimates that the law will reduce deficits by $143 billion over the first decade and by about $1.3 trillion in the second decade.