Healthcare Spending Explodes: Biggest Jump Since 1980

Spending on health care grew an astounding 9.9% in the Bureau of Economic Analysis’ advance estimate of first-quarter GDP.

It’s the biggest percent change in healthcare spending since 1980, when healthcare spending jumped 10% in the third quarter. Analysts said it’s primarily due to a consumption boost from the implementation of the Affordable Care Act. Adjusted for inflation, America is spending more on health care than ever before.

(Brett Logiurato, Business Insider)

Comments (14)

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  1. John Fembup says:

    This can’t be true.

    The administration has repeatedly said that medical care spending has decreased because of Obamacare. In fact, the administration told us Obamacare was responsible for decreases in spending starting back in 2009 – before most of Obamacare took effect. That’s some powerful impact.

    So this story can’t be true.

    It must come from those House Republicans asking their lying questions again.

    • John R. Graham says:

      Yes, and they have also infiltrated the Bureau of Economic Analysis, previously in the executive branch!

    • Alex B says:

      Bunch of liars, bunch of buyers everywhere. There are so many lies going around involving this healthcare reform, that it is impossible for us to determine who is telling the truth and who is lying to us. Not the kind of situation we hope our government to put us through.

  2. Peter A says:

    How much of the increase is due to the launch cost? The administration spent a lot of money this first quarter in order to achieve their goal of 7 million enrollees (or to trick people that they did). The question is how much of the spending was actually spent on care?

  3. Freud says:

    “Analysts said it’s primarily due to a consumption boost from the implementation of the Affordable Care Act.”
    I think America needs more economic stimulus rather than the government-led social programs.

  4. Logan M says:

    I think that what should worry us is the significant different the GDP growth was compared to estimate. People claimed weather, yet this factor was included when the number was forecasted. It is a way to dissimulate the bad news…

  5. Perry says:

    Wait, I thought my health care was going to be free!

  6. Chester D says:

    Many economists have a positive outlook towards the economy. Me, I think we are in the brink of another recession.

  7. John Fembup says:

    Imagine hearing this on the evening news:

    Good economic news, sharply increased housing sales.
    But bad economic news, sharply increased medical spending.

    I understand that Obamacare was sold to the public on the promise to make medical insurance affordable. I understand that this is not possible unless medical care can somehow become affordable . . . and therefore, that the whole promise of “affordability” is questionable.

    However, I’m not sure I understand the economics of why higher spending on housing is good while higher spending on medical care is bad.

    • Erik says:

      It all depends on who pays for the study because it is all the same. Money going from one hand to the next. Be it the Banker, the Broker or Insurance Company. That is the economy.

      • John R. Graham says:

        These data are from the Bureau of Economic Analysis (BEA), which means you (the taxpayer) paid for it.

  8. Dennis Byron says:

    The way I read the actual BEA report (as opposed to reading others’ opinions about the report, maybe after the others actually read the BEA report… or not), I believe this healthcare spending estimate is totally modeled. It may be based on some Jan/Fed data that is not specified but the BEA report specifically says its report does not reflect the March hockey stick in PPACA-related insurance enrollments.

    I would not put much credence in the modeled numbers. It seems totally against human nature that what we know to be a very small percentage of the population (under 1%) — even under the rosiest Obama-administration scenario for “previously insured vs. not previously insured” and “paid premium vs. did not pay premium” prior to the hockey stick — received insurance on Jan 1 or Feb 1 for the first time (or for the first time in a while) and rushed out to the doctors. You can’t even get an appointment that fast if you have not previously had a doctor.

    So either something else drove the reported spending increase or the BEA model is wrong (maybe so as to not show that the economy actually deflated… but with that last comment I am repeating another’s opinion).

    • John R. Graham says:

      Thank you. The report discusses the effect of ACA enrollment in the “Technical Note”. Yes, it looks like they took the enrollment numbers and extrapolated spending from enrollment, rather than measuring spending directly.

      However, the other components of the advance estimate will also be subject to revision, so we will see what the net effect is.