U.S. healthcare spending is exploding, wreaking havoc on economic growth

U.S. healthcare spending is exploding, wreaking havoc on economic growth

The Obama Administration has been trumpeting the successes of Obamacare, but new findings indicate that our health care costs are going through the roof.

Healthcare spending is blasting off into the stratosphere, rising at double the rate of the economy in the second quarter and creating fears that things are about to get out of control.

The U.S. Commerce Department’s Bureau of Economic Analysis released its advance estimate for second-quarter gross domestic product, and healthcare costs jumped 4.9 percent compared to the second quarter last year — and, despite how well the economy has been performing lately, it can’t even touch that: it grew just 2.3 percent over the same period, according to a Modern Healthcare report.

That’s the second straight quarter we’ve seen rapid growth in healthcare spending despite an economy that can’t quite keep up even with its recent strength. Back in the first quarter, healthcare costs were up even more — 5.7 percent compared to 2014.

This comes as President Barack Obama trumpets the success of Obamacare — more formally known as the Affordable Care Act — in states like California, which now has 70 percent of the previously uninsured on its rolls ever since the ACA was passed. The only states where Obamacare appears to be underperforming are in conservative states that have actively tried to block the implementation of Obamacare.

But all is not necessarily well with ACA, based on the fact that healthcare costs are very clearly not under control.

Still, analysts say that you can’t read too much into the first estimate of quarterly growth, and these numbers are nothing to get alarmed about. After all, healthcare expenses ended up getting revised downward in the first quarter of 2014 after initial projections showed them higher — apparently, bad weather caused people to not take advantage of coverage expansions.

And some analysts also argue that since healthcare is tied to employment, as employment continues to rise, the contributions will as well, lowering those healthcare costs.

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