I suspect that this is something that will debated for decades. This study, of 3,137 of the 3,144 U. S. counties, certainly seems to have found that healthcare insurance premiums have risen sharply under the PPACA:
There are hundreds of aspects of Obamacare that people argue over. But there’s one question that matters above all others: does the Affordable Care Act live up to its name? Does it make health insurance less expensive? Last November, our team at the Manhattan Institute published a study indicating that Obamacare had increased the underlying cost of individually-purchased health insurance in the average state by 41 percent in 2014, relative to 2013.
Across the country, for men overall, individual-market premiums went up in 91 percent of all counties: 2,844 out of 3,137. For 27-year-old men, the average county faced 91 percent increases; for 40-year-old men, 60 percent; for 64-year-old men, 32 percent.
Women fared slightly better; their premiums “only” went up in 82 percent of all counties: 2,562 out of 3,137. That’s because Obamacare bars insurers from charging different rates to men and women; prior to Obamacare, only 11 states did so. Because women tend to consume more health care than men, the end result of the Obamacare regulation is that men fare somewhat worse.
I think there are several possible retorts to this study. You could take the position that it’s still early days and that at some point the PPACA will result in lower healthcare premiums. This might be thought of as “the Pony Hypothesis”. The trends for that don’t look particularly good. You could also point out that the study merely determines that healthcare insurance premiums have risen not that the PPACA caused insurance premiums to rise. It might be that premiums increased despite the PPACA rather than because of it.
It could also be maintained that since the study doesn’t not appear to be weighted by population but is strictly geographic that although prices increased for most areas they didn’t increase (or increased at a lower rate) for most policies. You can’t conclude that from the study but it might be the case. That will be the food for a different study, presumably one carried out by the legislation’s defenders.
The study does cast the number of insurers getting into the healthcare market in a different light. We may be seeing a gold rush incentivized by rising premiums and the mitigation of risk in the form of federal subsidies.
Whatever the case, it’s becoming increasingly difficult to claim that the PPACA is achieving one of its stated objectives, to reduce healthcare premium prices.
The equation that forms the title of this post just says that “healthcare spending is composed from the spending of individuals plus spending by governments”, something obvious stated in mathematicalese. Democrats have focused their attentions on the “I” component, the shrewd political strategy. If you reduce what people pay out of pocket by increasing government subsidies, from an experiential standpoint healthcare will cost less. Republicans on the other hand have tended to focus on the “G” component. That was the essence of the Ryan plan. It did nothing to reduce “H” (unless you assume that patient-induced over-consumption is the most significant driver of healthcare spending, something for which there is little evidence) while driving “G” down which inevitably meant that “I” would increase.
I have focused unfailingly on “H”. Healthcare insurance premiums are proportional to the cost of the underlying risk. As long as spending is increasing in real terms, healthcare insurance premiums will increase in real terms, too. Changing who writes the checks won’t change that.