What Will Health Care Reform Look Like in 2019?

Health care costs will raise projected spending by about 1 percent over 10 years and Medicare cuts could put 15 percent of hospitals into the red, according to a new report from the Center for Medicaid and Medicare Services. The full estimates are here (warning: PDF).

The report is generating quite a bit of heat from bloggers, but it's not exactly new news. The effect of the law is that American health care will cover more (35 million more) and cost more ($311 billion more) over the decade. We knew that.

If we squeeze Medicare payments, they will grow more slowly than the cost of providers' services, which could make make some Medicare Part A providers unprofitable. That austerity pressures hospitals' to either find new efficiencies to absorb the cuts or effectively lobby to limit Medicare cuts. Liberals have long hoped for the former. Conservatives have long expected the latter. Again, we knew that before this report.

This projection of 2019 doesn't blow up our expectations, but it's not the main story, anyway. The key issue for health care reform optimists is what happens after 2019. The excise tax creeps. The exchanges swell. We fire a slew of arrows at the medical inflation monster, from the independent Medicare counsel, to comparative effectiveness research, to the innovation center. Will the arrows hit and stick? We don't know. We only know that two months ago, we had an empty quiver and 40 million uninsured Americans. And now we have a law.

PS: Here's the key graph from the report:

Effect of Health Care Reform.png



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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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