By Lucia Mutikani
WASHINGTON, April 30 (Reuters) – As the U.S. economy teetered on the brink of contraction in the first quarter, one thing stood out. Healthcare spending increased at its fastest pace in more than three decades.
That surge is attributed to the implementation of President Barack Obama’s signature healthcare law, the Affordable Care Act, also known as Obamacare. Because of Obamacare, the nation narrowly avoided its first decline in output in three years.
“GDP growth would have … been negative were it not for healthcare spending,” said Harm Bandholz, chief economist at UniCredit Research in New York.
Healthcare spending increased at a 9.9 percent annual rate, the quickest since the third quarter of 1980, and it contributed 1.1 percentage points to GDP growth.
The economy expanded at only a 0.1 percent rate in the first quarter, held back by a drop in exports and business investment, which economists attributed to a harsh winter. A sharp slowdown in the pace of inventory accumulation was also a drag.
The gauge of healthcare spending published on Wednesday is simply an estimate based on Medicaid benefits, ACA insurance exchange enrollments, and other related information. Firm data will not be available until June, and the government could well revise its figures for both healthcare and overall GDP.
About eight million people have so far signed up for healthcare insurance under the law, and the jump in healthcare spending had already been flagged in the government’s monthly income and consumer spending data.
White House economic adviser Jason Furman said the increase should not be a cause for alarm.
“Any upward pressure on healthcare spending growth from expanding insurance coverage will cease once coverage stabilizes at its new, higher level, so it does not affect the longer-term outlook for spending growth,” he said in a statement.
Obamacare provides coverage for residents who previously did not have health insurance, as well as subsidies to those who cannot afford monthly premiums. These transfers are helping to free-up income and more people are making visits to hospitals.
Economists said both the subsidies and hospital visits were contributing to the surge in healthcare spending.
“You have those two separate things that are working; the challenge is we don’t know the split between newly insured and previously insured,” said Alec Phillips, an economist at Goldman Sachs in Washington.
Healthcare spending could rise again in the second quarter, but probably not at the first-quarter’s rapid pace.
Through February, estimated personal income from Medicaid and other social benefits – the category where the tax subsidies through the health exchanges show up – was running ahead of the actual increase in healthcare consumption.
“That kind of implies that there may be at least a little bit more in terms of growth in health consumption from essentially those new benefits that have been provided,” said Phillips. “With that said it also implies that we have probably seen a decent amount of it already.”
Government transfers, including health insurance premium subsidies, boosted personal income in the first-quarter. (Reporting by Lucia Mutikani; Editing by Andrea Ricci)
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PHOENIX (AP) — A jury on Wednesday spared the life of an Arizona woman convicted of beating her husband to death with a hammer, sentencing her to life in prison instead of the death penalty.
The decision in the penalty phase of Marissa Devault’s trial comes after the jury deliberated for about three days since April 22. Devault nodded when jurors were polled about their decision, and she hugged her attorneys before leaving the courtroom smiling.
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“Nemo” was finally found.
When the famous fish went “missing” from Sydney Harbor earlier this month, a 5-year-old boy named Aiden Hyde followed a trail of clues in order to recover the clownfish. The scavenger hunt was all part of a Make-A-Wish adventure that was made possible by local businesses and the community in Cairns, Australia.
After Aiden was diagnosed with stage 4 neuroblastoma, the young boy underwent round after round of chemotherapy. Now, Aiden is in remission, and Make-A-Wish Australia offered to grant the “Finding Nemo” fan a wish of his choice. So, on April 29, Aiden followed clues around Cairns to find the colorful fish.
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WASHINGTON (AP) — Rep. Paul Ryan said Wednesday he had a productive meeting with members of the Congressional Black Caucus, a gathering that came weeks after comments the Wisconsin Republican made about poverty and inner cities stirred allegations of racism from some members of the caucus.
The 2012 vice presidential nominee and members of the black caucus said the more than hour-long private meeting was polite but did not yield any policy breakthroughs.
“The first step to real reform is a frank conversation,” Ryan said. “We need to figure out what works.”
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Donald Sterling’s public image continues to crumble before our eyes after the NBA team owner’s blatantly racist remarks were caught on tape for the world to hear.
Corporate sponsors are fleeing his Los Angeles Clippers organization, the NBA has banned him for life and now charities are severing ties from the billionaire and his philanthropic dollars.
TMZ is reporting two major organizations are rejecting Sterling’s gifts — Goodwill Southern California and A Place Called Home.
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LOS ANGELES (AP) — Federal officials say technical issues stopped all planes from departing from the Los Angeles area for more than an hour.
In addition, the Federal Aviation Administration said Wednesday its air traffic control facility had also temporarily stopped accepting additional flights into the airspace.
The agency says some flights were diverted as it gradually restores the system.
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For reasons that are utterly beyond us, single life gets bad rap. But don’t let its ragged-upon reputation fool you: Being single is not all crippling-cat-lady loneliness and calls from your mother about the status of your love life. (Okay, you generally do have to field some calls about your love life from your mom, but we digress.)
For those of us recently out of a long-term relationship, being single can be liberating: Once the sting of heartbreak wears off, you start to realize that being by yourself isn’t the end of the world — and that calling all the shots in your life, without any outside influence from your ex, feels really, really good.
HuffPost Divorce readers know as much. Below, they share the one thing they appreciate most about being on their own since their divorces.
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