Last year's health care overhaul will make America's total health spending rise even faster than it would have over the next decade, according to new projections from the federal Medicare and Medicaid administration. The annual rise is projected to be slight—about 5.8 percent per year, or 0.1 percent higher than it would have been without the law—but that's only under a couple of rosy assumptions.
First, it assumes that Congress allows physician payments to drop by 30 percent at the end of this year as scheduled. This just won't happen. Republicans in Congress don't want it to happen. Democrats don't want it to happen. The president and the Secretary of Health and Human Services have all indicated that they don't want it to happen. Which means that the scheduled cuts won't occur.
As Politico notes, it also assumes that health providers and administrators continue to make efficiency gains that may not be sustainable:
In a conference call with reporters Wednesday, [Medicare actuary] Foster said that the report also includes productivity improvements that would slow the growth of spending by 1.1 percent each year, a pace that, "in the long run, it may be difficult to sustain." He added that revenue projections for an excise tax on exceptionally generous employer-offered health plans, slated to take effect in 2018, may be lower than expected.
Nor do the new projections factor in the law's broken long-term care insurance program.
The projections also omit any financing for the embattled CLASS long-term care program, which has again been targeted for repeal in the debt negotiations and, in any event, is required by law to be paid for by enrollee premiums.
Which is convenient, given that even HHS Secretary Kathleen Sebelius has admitted that the program won't work as currently designed.