Thursday, November 21, 2013

ACA Reducing Health Care Costs

The Affordable Care Act was designed to accomplish two very important goals: 1.) make affordable health care available to every American and 2.) reduce the cost of health care in this country.
The jury is still out on goal #1.  Even though parts of the law have been in effect for three years the enrollment piece has only been up and running for 6 weeks.  The difficulties with the website have been well documented.  They are inexcusable.  Presumably they will be fixed.  History will eventually determine to what extent the botched rollout will have on reaching this long term goal.
There is however ample evidence that the ACA is well on its way to achieving goal #2.
USA TODAY highlights a new report which states that over the past three years our “health care spending has risen by the lowest rate ever recorded.” 
The White House Council on Economic Advisors states that health care costs from 2010-2013 rose only 1.3%.  The report further states that for the first time in history Medicare spending over the same period did not increase while Medicaid spending decreased by 0.5%.
According to Council on Economic Advisors Chairman, Jason Furman “If just half the recent slowdown can be sustained, health care spending a decade from now will be $1,400 per person lower…Reduced health care costs for employers could lead to 200,000 to 400,000 new jobs per year by the second half of the decade.”
The USA article goes on to say that due to the cost reductions the Congressional Budget Office “reduced Medicare and Medicaid spending projections in 2020 by $147 billion since 2010.”
Health care experts agree that the reduction in spending is due in part to the Affordable Care Act.  Republicans of course disagree.
Brendan Buck, a spokesperson for Speaker Boehner is quoted in the article saying that the slow growth in health care spending “was the result of the terrible economy under President Obama, not his health care law.”
Dean Baker, Co-Director of the Center for Economic and Policy Research responded to Boehner’s political attempt to throw cold water on the report: 
“The idea that it is the economy is just silly” said Baker.  “In 2008-2009…fair enough, but now that we are four years out, no one could say that with a straight face…Suppose the opposite were happening.  Suppose growth went up 8%.  Does anyone doubt that we would be blaming President Obama and the Affordable Care Act for that?”
The early returns indicate that the ACA is in fact reducing the cost of health care.  Whether the cost reductions are sustainable is yet to be determined.
Health care spending encompasses 1/6th of our economy.  It’s a really big deal!  Republicans have no alternative plan.  So when it comes to the ACA all they can do is highlight the negative and lie about the positive.  It is easy to criticize.  It is difficult to govern.          

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