Monday, June 18, 2012

Obamacare’s Big Winners: Government Bureaucrats

Last week we summarized the release of the Medicare actuary’s annual projections for health care spending in the coming decade.  However, there’s one nugget in the report that initially skipped our attention – which is the fact that by far the greatest growth in health care spending comes from the category devoted to government administration.  As the chart below demonstrates, the actuary’s report estimates health spending in 24 distinct categories, and spending on government administration outclasses them all:

  • A 12.3% increase in 2011 – the only double-digit increase, and more than twice the next-highest growth rate (5.8%) among health spending sub-categories
  • An 11.0% increase this year – again, the only projected double-digit increase, and nearly four percentage points higher than the next-fastest growing sub-category
  • A 6.3% increase in 2013 – the second-fastest growing sub-category of health care spending
  • A whopping 11.7% increase in 2014, the year Obamacare’s mandate and Exchanges take effect – the fastest-growing sub-category of health spending

In three of the first four years of Obamacare, government spending will be the fastest growing segment of health costs – and in the fourth year, government spending will be the second-fastest growing segment.

Given this record, some may find particularly ironic this quote from this morning’s Wall Street Journal regarding the French elections: Socialist President Francois Hollande “may have to shelve some of his costly proposals – such as hiring 12,000 civil servants a year.”  Last week’s report from the Medicare actuary demonstrates the Obama Administration has shown no similar compunction to stop hiring new bureaucrats and spending more money on government as it attempts to implement its 2700-page health care law.  Or, to put it another way, thanks to Obamacare, public sector bureaucrats are doing just fine.