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Examining Health Care Spending Since Obamacare


Since the Affordable Care Act - Obamacare - became law in 2010, the number of Americans without health insurance has fallen by more than 40%, which seems like a success. Right? But meanwhile, overall health care spending continues to rise, which is maybe not such a success. So where are we with Obamacare?

Since we're coming up on the end of the year, we thought it would be a good time to look at how it's doing. We're with David Wessel. He's director of the Hutchins Center at the Brookings Institution. Good morning, David.

DAVID WESSEL, BYLINE: Good morning, Noel.

KING: OK. So let's start with the big picture here. Over the past 10 years, what is the trend in health care spending?

WESSEL: America still spends more on health care than other countries without getting better results. And overall, health care spending continues to grow faster than the economy does. But the 2010s are a decade in which national health care spending grew more slowly than it has in the recent past. So health care accounted for 17.3% of GDP in 2010; 17.7% percent of GDP in 2018.

That increase of four-tenths of a percent is, as my colleagues at Brookings Matt Fiedler and Christen Young point out, smaller than it has been in any previous eight-year period. They say over previous eight-year periods, spending grew five times as fast. And that's interesting because it coincides with a reduction in the number of Americans, as you said, who are uninsured. That's gone for about 15% without insurance in 2010, when the ACA was signed into law, to about 9% today.

KING: OK. So it's really obvious that the ACA reduced the number of people who don't have insurance. We know that. But what role did it play, then, in health care spending?

WESSEL: I would say it played a small role in that. And here's where it made a big difference. Average annual growth in Medicare spending per person has slowed significantly since the ACA was passed. And that's simply because the ACA said we're going to pay doctors and hospitals and other health providers less. But what the ACA didn't do is slow the pace of spending increases by the private sector, which has been growing much faster than government spending programs. And that's partly because we've seen a lot of hospital mergers and other consolidations that allow these providers to raise prices. The private sector - private insurers, the employers - have to pay those higher prices. The government, because it sets prices, doesn't pay them.

KING: I want to ask you about something that we hear from people all the time, which is people saying flat-out, I am paying more for health care every year. Are they right?

WESSEL: Yes, most of them are right. Here's why - because the rate of increase is slowing but spending is still rising. And two-thirds of American adults under age 65 get insurance through their employers, or a small number buy it from insurers directly on the Affordable Care Act exchanges. And the cost of employer-provided health insurance has increased.

And on top of that, workers are paying an increasing share of the costs. You hear a lot about higher copays and deductibles. Or they have the workers have to pay a higher share of premiums. And then there are the well-publicized increases in the price of some prescription drugs. So a lot of people are paying more for their health care.

KING: It's been 10 years since the ACA was signed into law. Republicans admit trying to undo it ever since. Has it become more or less popular over the last 10 years?

WESSEL: Well, some provisions of the ACA have always been very popular, like the ban on insurance companies denying coverage due to preexisting conditions. But when pollsters asked a general question - do you have a generally favorable or unfavorable opinion of the health reform law? - the public has been and remains deeply divided. But interestingly, since President Trump took office with his attacks on the ACA, the fractions of Americans who say they have a favorable opinion of the Affordable Care Act has risen from 41% to 52%.

KING: Interesting. David Wessel of Brookings. Thanks.

WESSEL: You're welcome. Transcript provided by NPR, Copyright NPR.