March 24, 2016

SIXTH-ANNIVERSARY THOUGHTS: Obamacare Was Going to Lower Health Care Costs. What Actually Happened.

Hawking the Affordable Care Act (ACA) six years ago, President Barack Obama said, “Every single good idea to bend the cost curve and start actually reducing health care costs [is] in this bill.”

Team Obama projected that their version of health care reform—replete with the bells and whistles of “investments” in health information technology, health care delivery and payment reforms—would translate into big cost reductions for individuals, families and businesses. In his iconic health care “talking points”, the president said that the “typical” family would see a yearly $2500 savings in their health costs.

Those family cost savings, of course, have not materialized.

In year six, even with lower than anticipated enrollment in the health insurance exchanges and the refusal of 21 states to participate in the law’s Medicaid expansion, the health care cost curve is still on an upwardly mobile trajectory.

It is fueled by sharp increases in both public and private health care spending.

Centers for Medicare and Medicaid Services data show that total per capita health insurance spending will rise from $7,786 in 2016 to $11,681 in 2024. Looking at the future of employer-based health insurance costs, the Congressional Budget Office (CBO) projects that job-based premiums are poised to increase by almost 60 percent between now and 2025.

Obamacare’s cheerleaders have allowed their exuberance to outrun their supply lines. Medicare trustee Charles Blahous best summarized the problem:

“Given how the ACA’s advocates touted the law as ‘bending the cost curve down and reducing the deficit’ while occasionally in the same sentence crediting it with expanding coverage to ‘more than 94 percent of Americans’, many Americans could be forgiven for not understanding that those two goals were in conflict.”

Obamacare cannot deliver the impossible (even if it were good public policy­— and it isn’t).

It’s like the whole thing was just a gigantic fraud, sold with a pack of lies.

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