How Obamacare saved 2.6 Trillion in Healthcare Cost
We know the Affordable Care Act stvered more than 20 Million people, and now it has been confirmed the American health care system is on track to spend $2.6 trillion less in Healthcare cost from 2014 to 2019 than before the Affordable Care Act became law.
While the republicans have touted for years the challenges with Obamacare, it’s still has shown a great reduction in terms of dollars, $2.6 trillion to be exact, which is equivalent to about 15 percent of U.S. gross domestic product. That’s the conclusion researchers at the Urban Institute came to when comparing health care spending projections made in 2010 before Congress passed the ACA, and projections made later that year after President Barack Obama enacted the statute, with more recent findings.
In other words, more Americans have health coverage and greater access to medical care — and they’re getting it — but the country as a whole is spending less money than expected, and will continue doing so for at least the next several years.
Prior to the roll out of the Affordable Care Act, several actuaries predicted U.S. health expenditures would total $23.2 trillion between 2014 and 2019. After Obamacare became law, the office revised that projection to $23.7 trillion, reflecting the hundreds of billions of dollars needed to pay for the Affordable Care Act’s expansion of government-subsidized health coverage. In 2015 the actuaries further revised the total to $21.1 trillion.
As the reports notes, the Congressional Budget Office (CBO) has re-evaluated the Affordable Care Act’s spending and concludes health care cost will be less costly than originally estimated.
There are several factors that have led to this reduced estimate. The largest factor is the economy itself. Damages brought on by the Great Recession help reduce health care spending as people lost their jobs, incomes and health insurance, and subsequently had less access to care. The cost reduction was then additional supported through the slow recovery in the years following the recession. This kept spending from quickly rebounding.
However as the economy recovers from the recession, health care cost growth hasn’t reverted to the levels before Obamacare and before the Great Recession, when annual increases could reach into the double digits, even though health care inflation has started to increase again. Instead, spending is expected to rise by about 5 or 6 percent a year from 2014 to 2019, a bit faster than the roughly 4 percent annual increase from 2010 to 2014.