A demonstrator in support of U.S. President Barack Obama's health-care law, the Affordable Care Act (ACA), holds up a "ACA is Here to Stay" sign after the U.S. Supreme Court ruled 6-3 to save Obamacare tax subsidies outside the Supreme Court in Washington, D.C., U.S., on June 25, 2015.
Photo by Andrew Harrer/Bloomberg/Getty

‘Obamacare’ contributes to dramatic health care savings

The United States spends a lot on health care, but thanks in part to the Affordable Care Act, we’re going to spend quite a bit less than expected. The Huffington Post reported yesterday:
Twenty million or so more people have health insurance now than they did before Obamacare, and yet the American health care system is on track to spend $2.6 trillion less from 2014 to 2019 than before the Affordable Care Act became law.
 
That’s right – $2.6 trillion, which is equivalent to about 1.5 percent of U.S. gross domestic product. That’s the conclusion researchers at the Urban Institute came to when comparing health care spending projections made in 2010 before Congress passed the ACA, and projections made later that year after President Barack Obama enacted the statute, with more recent findings.
I can appreciate why this is counter-intuitive – we’re getting more while spending less – but it’s nevertheless true.
 
“Health care costs have had several years of really historic low spending during the period, so overall, public programs, private spending is all less than we thought it would be,” Gary Claxton, vice president at the Kaiser Family Foundation, told TPM. “Each year we see spending going up 3 percent, 2 percent, whatever, and not 5 percent, and because that stuff compounds, when it continues to go up more slowly … it starts to really add up.”
 
The right will be quick to insist that the Affordable Care Act can’t claim all of the credit for the progress, and there’s some truth to that. The report noted, for example, that in recent years, policymakers have approved Medicaid and Medicare savings, which contribute to the overall savings.
 
“There’s lots of things, and you can’t ever really disentangle them,” Claxton added.
 
But it’s also true that the ACA matters. From the Huffington Post’s piece:
Although the Urban Institute researchers stop short of crediting the ACA with the seeming shift in the health care spending trend, they do note that if the Medicare actuaries and the CBO are wrong, and if Obamacare’s cost-cutting initiatives are working as Congress intended, the overall numbers could wind up smaller still.
 
“Even the current CMS forecast could prove too high,” the report concludes. “If current CMS projections do not fully reflect this pattern, spending projections will continue to fall and it will become harder not to attribute at least some of the sustained cost containment to the ACA.”
In case it’s not obvious, repealing part or all of the federal reform law would necessarily mean reversing course on the recent progress.
 
 

Affordable Care Act, Health Care Policy and Obamacare

'Obamacare' contributes to dramatic health care savings