2014 health spending grew at fastest rate of Obama years

WASHINGTON - U.S. health-care spending last year grew at the fastest pace since President Obama took office, driven by expanded coverage under his namesake law and by zooming prescription drug costs, the government said Wednesday.

After five years of historically low growth, national health expenditures increased by 5.3 percent in 2014, reaching $3 trillion, or $9,523 for every man, woman and child. That followed a 2.9 percent increase for 2013. Such seemingly small percentage shifts resonate when the total is $3 trillion.

The report by nonpartisan experts at the Department of Health and Human Services may signal the end of an unusually long lull in health-care inflation that has benefited the Obama administration. While the president's health-care law has increased coverage, the cost problem doesn't appear solved. Even now, the Republican-led Congress is preparing to send a repeal bill to his desk.

"From the political point of view, it's absolutely significant," said Robert Blendon, who follows public opinion on health care at the Harvard T.H. Chan School of Public Health. Critics will point to the report as authoritative evidence the health law is starting to raise costs.

Underscoring concerns about affordability, the report also found that health-care spending grew faster than the economy as a whole, reaching 17.5 percent of GDP.

"The return to faster growth and an increased share of GDP in 2014 was largely influenced by the coverage expansions of the Affordable Care Act," said the report, referring to Obama's law. It made no predictions, saying future trends depend on how the health-care industry adjusts to continuing change and how the economy fares.

Political appointees at HHS responded quickly, saying that spending is still not growing as fast as in the years before Obama's law, which passed in 2010.

"Health care spending growth stayed well below the trend seen prior to the Affordable Care Act," Richard Frank, a top economic adviser, said in a statement.

The increase "is not surprising given that more people are covered and getting the health care they need," Frank added. Much of that growth "will be temporary and will fade in the coming years," he suggested.

The report confirmed the increase in insurance coverage due to Obama's law, already documented by major national surveys that show the uninsured rate at 9 percent, a historic low.