U.S. to Spend over $600 Billion More on Health Care in 2014

The cost of healthcare in the U.S. is widely discussed right now due to the implementation of the Affordable Care Act (ACA), also called ‘Obamacare.’ Under the ACA, Americans will pay an average premium of $328 monthly for a mid-tier insurance plan (before government subsidies).

While President Obama promised that the ACA would lower premiums for the typical American family by up to $2,500 per year, the Center for Medicare and Medicaid Services (MS) estimates that the new law will increase health spending by roughly $621 billion or 6.1 percent in 2014. After that, it’s expected to average 6.2 percent annually for the next 7 years.

Whether you support the ACA or not, there is no denying that health care spending is a major problem in the U.S. It has been growing relentlessly over the last decades, becoming one of the major contributors to the nation’s long-term fiscal deficit.

, amounting to almost 1/5 of the total economy. This leaves little room for other federal government priorities like social security or defense policy.

Even worse, health care spending is growing 1.5x faster than the country’s GDP, making it almost impossible to manage in this barely recovering economy.

So, what are the reasons for the exorbitant rise in health care costs?

A thorough examination of the available data was conducted and concluded that the 7 most significant causes for increasing health care costs are new medical technology, provider price inflation, low primary care use, high spending on specialists, aging population, increase of chronic illnesses, and fraud.

These factors drive people’s health insurance premiums up remarkably. The infographic by Carrington College’s Medical Billing Program highlights these trends.

 

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Source: Carrington.edu