Despite Obama’s Claims, Health Spending Grew 5.5% Due to Affordable Care Act

In 2014, health spending totaled $3.1 trillion; $9,695 per person

• August 6, 2015 3:30 pm


Health spending increased 5.5 percent in 2014, totaling $3.1 trillion and averaging $9,695 per person, according to a report published by the Center for Medicare and Medicaid Services’ Office of the Actuary (OACT).

The OACT said it expects health care spending to increase by an average of 5.8 percent from 2014 to 2024. One reason for the increase is that more Americans are signing up for coverage under President Obama’s Affordable Care Act (ACA).

Obama promised that the ACA, otherwise known as Obamacare, would decrease costs for American families and lower health care spending overall. In 2014, the same year health spending growth climbed 5.5 percent, Obama said in the White House rose garden, "Under this law, the share of Americans with insurance up and the growth of health care costs is down, and that’s good for the middle class, and that’s good for our future."

Despite Obama’s claims, the OACT’s lead author said he expects even faster growth in spending over the next decade.

"After six years of national health spending growth hovering near historically low rates, we're projecting faster growth in health spending over the next decade, reflecting expanded insurance coverage under the ACA, expectations of continued improvements in the economy, and population aging," said Sean Keehan, the report’s lead author. "However, these projected growth rates are significantly lower than those observed over the three decades prior to the recent recession."

The report found even higher growth in spending under Medicaid.

"Overall spending, however, is projected to have increased by 12.0 percent in 2014 as a result of a 12.9-percent increase in enrollment related to the ACA coverage expansion."

In addition, 19.1 million individuals are expected to enroll in Medicare over the next 11 years due to the aging of the baby boom generation. According to the Medicare Trustees report, Medicare expenditures are expected to double by 2024.