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Obamacare and Health Spending



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As their hopes and claims have been dashed in recent weeks, some champions of Obamacare have been clinging to one last assertion: that the law is helping to bring down overall health spending. Harvard’s David Cutler tried to spin this tale a little earlier this month in the Washington Post, and the White House’s Council of Economic Advisers released a report last week that, while not actually claiming as much, tried to enable less careful outsiders to do so. And of course, less careful outsiders have obliged. 

Today, Charles Blahous of the Mercatus Center and the Hoover Institution (who is also one of the trustees of Social Security and Medicare), takes on those claims using the available data and projections from the CMS actuaries — the same data source that Cutler and the CEA pointed to. He shows that the evidence simply does not support the idea that Obamacare is reducing health costs and that in fact, taken as a whole, the law seems to be bending the cost curve upward, not downward. He concludes, with admirable restraint: 

Public confidence in the ACA took a beating when it was revealed that millions would lose health coverage that they had been told they could keep. Now the public is being told that the ACA is responsible for government actuaries’ improved health spending projections, when an examination of those projections clearly shows that not to be so. If the supporters of the ACA want to win back public support and confidence, they will need to find a stronger case for the virtues of the law.



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