Whether you love or hate Obamacare, the health insurance program appears to have softened an otherwise dismal start to 2014 for the U.S. economy. GDP advanced a meager 0.1 percent annual rate in the first quarter, the Commerce Department said on Wednesday.
One bright spot was consumer spending, which rose 3 percent. That was largely due to a surge in health-care spending, which jumped almost 10 percent during the first three months of the year, adding $43.3 billion in spending.
So what's driving that jump? With millions of Americans buying insurance coverage via the Affordable Care Act's health-care exchanges, previously uninsured consumers may be demonstrating strong demand for physician and wellness services.
"If health care spending had been unchanged, the headline GDP growth number would have been -1.0 percent," wrote Ian Shepherdson, chief economist at Pantheon Macroeconomics, in a research note. "Spending on both doctors and hospital services [is] now running at more than twice their pre-Obamacare trend, indicating that pent-up/hidden demand for health care was huge."
The surge in health-care spending amounted to the biggest percent change in the segment since 1980, notes Business Insider. Roughly 8 million Americans signed up for health-care plans through Obamacare's exchanges, whose open-enrollment period ended in March. Obamacare also broadened eligibility for Medicaid and the Children's Health Insurance Program, which enabled additional consumers to access health-care services and goods.
The report confirms signs from earlier this year that the health-care law would boost the U.S. economy this year, with one economist estimating in March that Obamacare could boost medical spending by $50 billion in 2014.
Still, more Americans hold a negative view of Obamacare than positive, at 46 percent to 38 percent, respectively, according to an April Kaiser Family Foundation poll. And some critics may not be appeased by Obamacare's positive impact on the economy, given that the U.S. spends more on health-care per person -- $8,508 -- than any other industrialized country.
Nevertheless, health-care wasn't the only boost to the first quarter. Spending on utilities also rose, thanks to the polar vortex and an unusually cold winter across much of the country.
for more features.