ObamaCare will not contain health care costs
The Supreme Court will any day now issue their decision on the Patient Protection and Affordable Care Act (PPACA), also known as ObamaCare. There is little doubt that, from a constitutional perspective, much is on the line. But from a fiscal perspective, there is just as much to be concerned about.
We’ve noted that ObamaCare will cost more than the Congressional Budget Office (CBO) originally estimated. Recent studies, both from the CBO and Medicare trustee Charles Blahous underline the fiscal threat of the program to taxpayers. But the Heritage Foundation notes another recent study from the Centers for Medicare and Medicaid Services Office of the Actuary (OACT) showing that ObamaCare will do nothing to lower health care costs:
The Centers for Medicare and Medicaid Services Office of the Actuary (OACT) just released its projections for national health spending through 2021. The picture isn’t pretty, as health spending will continue to increase at a much faster rate than the gross domestic product (GDP), consuming 19.6 percent (almost one-fifth) of the nation’s economy in 2021.
Growth in health spending will remain modest until 2014, when Obamacare expands Medicaid to an additional 19.6 million Americans and creates exchanges to regulate private insurance and administer new federal subsidies. Once these changes go into effect, Medicaid spending will increase by 18 percent, and private health insurance spending will increase by 7.9 percent, since more people will gain coverage through the government-run exchanges. According to OACT, “Together, Medicaid and private health insurance spending contribute to an overall acceleration in projected national health spending growth to 7.4 percent, which is 2.1 percentage points faster than would be expected in the absence of health reform.”
The Obama Administration clearly chose to wear rose-tinted glasses to interpret the projections. In an interesting twist on the CMS report, Secretary of Health and Human Services (HHS) Kathleen Sebelius touts “No increase in national health spending as a percent of GDP for five years.” But the Secretary backdates the projections, going on to say, “From 2009 through 2013, national health spending will not increase as a percent of the economy.” Of course, she knows that the major provisions of Obamacare don’t begin until 2014.
In addition, OACT attributes slow growth in health spending between 2009 and 2013 to the poor economic climate, not Obamacare. They explain, “The sustained effects of the recent recession and modest recovery on projected growth in disposable personal income, insurance coverage, and unemployment rates are expected to continue to dampen health spending growth through 2013, much as they affected spending in 2008–10.”
The Washington Examiner points out that OACT puts health care spending at “$478 billion higher from 2011 through 2021 than it would have been without the law.” They also note that figure could rise higher if Medicare passed as part of ObamaCare cuts aren’t implemented.
If the Supreme Court manages to come up with some new precedent to keep ObamaCare in place, then Republicans will have quite a task in front of them in the fall as they try to win the presidency and enough seats in the Senate to repeal the law, though that by itself may be a difficult task. Or Mitt Romney, should he win in November, could just take a page out of Barack Obama’s book and simply ignore the laws via executive fiat.
But if the Supreme Court does shoot down the law, Republicans in Congress must start looking at real, patient-centerd alternatives on the issue. Several bills have already been introduced in Congress. Unfortunately, House Republicans haven’t decided what their health care bill will look like, though we’re already hearing that some main tenants of ObamaCare may remain in place.
Either way, via the Supreme Court or repeal, ObamaCare has to go. But Republicans, assuming that take control of Congress, have to get its replacement done right by passing legislation that will put the focus back on the patient, not bureaucrats.