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Is the Affordable Care Act Reducing Health Care Spending?

Recently President Obama reported to the Business Roundtable that increases in health care spending are at an historic low and credited this reduction to the Affordable Care Act. While it is indeed true that health care spending increases are lower than they have been in years past, Forbes states that these rates reflect a much larger trend that dates back over a decade.

Last year’s increase in per capita health care spending was 2.9%, which is actually the same as it was in 2009 — a year before the Affordable Care Act was signed into law. Increases in health care spending in the fiscal year of 2013 were lower than those of 2012, but higher than the increases of 2010 and 2011. It is fair to say that there has been no discernable trend in health care spending during Obama’s two terms. Increases in health care spending are indeed lower, however, but these changes date back to the early days of George W. Bush’s first presidency.

To understand the reduction of health care cost increases, one must examine three other developments. These include the growth of Health Savings Accounts and Health Reimbursement Accounts as well as a larger trend that has favored higher deductibles. These three developments have shifted the cost to patients, meaning more of the health care costs are coming out of their pockets.

HSA accounts offer people the opportunity to manage their own health care budgets. What this generally means is that patients are more discerning in choosing affordable care options than they would be if someone else — such as an employer — were footing the bill.

Although the Affordable Care Act may not be at the core of these lessened increases, the law is changing the financial and practical landscape of physicians and health care organizations. To learn more about how this law will continue to impact your practice, speak with a knowledgeable health law attorney with Buttaci Leardi & Werner, LLC.

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  • Posted on: Feb 5 2015