I think that Dana Goldman and Sarah Axeen’s post at Forbes can be summarized like this:
- The rate of increase in healthcare spending has slowed over the last couple of years.
- The slowdown began before the ACA was enacted.
- The slowing of the rate of increase was due to changes in Medicare.
- Those changes had nothing to do with the PPACA.
- The administration thinks so, too.
That would fully support the point I’ve been making for some time: the “doc fix” has promoted faster increases in healthcare spending than would otherwise have been the case.
However, I think they go off the rails here:
If—as the Administration argues—the only way to slow spending is through spillovers from Medicare to the private market, then we could have done without all the mandates, insurance exchanges and the like. To be fair, there is more to the ACA than slowing spending. It is supposed to cover the uninsured. But given the limited enrollment success to date, the Administration seems to be side-stepping that issue.
The Obama Administration had more eggs to fry than decreasing healthcare costs and some have even argued that decreasing healthcare costs was just a pretext for their other objectives. The most obvious objective is that they wanted more people to have healthcare insurance. Whether they’ve accomplished that remains to be seen. We’ll know soon enough. If the administration decides to make the data available.
At any rate we’ll soon be able to test their hypothesis:
Finally, and most important, 2014 will see an increase in spending as newly insured individuals with generous coverage seek new services. As a projected 7 million individuals gain insurance coverage through the health insurance exchanges and 9 million through Medicaid expansions, spending on health will grow at faster rates. The most recent CBO projections show new direct government spending of $23 billion for subsidies and other related spending. That does not include private and out-of-pocket spending by individuals on these services. The slowdown in spending trumpeted by the Administration, while important, will be short-lived. The lower Medicare spending growth and hopes of spillovers to the private sector cannot offset the growth in spending that will result from these newly insured individuals.
As I’ve been saying, we’ve had insurance reform now we need healthcare reform.