Government

Has Obamacare lowered the growth in health care inflation?Β 

There is little reason to believe that the Affordable Care Act has actually lowered health care costs and even less possible net cost savings when you consider the massive administrative burden added to governments and the private sector which are not counted as health care. 

The ACA has not been in effect long enough to have achieved the savings being claimed. 

It’s not hard to find government and ACA supporter reports of Obamacare savings based largely on declining health care inflation rates, but it is impossible to link those changes with Obamacare. 

A recent HHS release noted the rate of increase in health care spending from 2010 to 2015 was substantially less than the previous ten years and claims Obamacare as the driver. But there are two reasons to question that. First, the rates of general inflation and second the lack of specific provisions within Obamacare that could affect that type of change in a couple of years. In addition, the changes related to provider payment, changes in fee-for-service, pay-for-performance models, etc within Obamacare are limited to Medicare. 

Many other provisions in the ACA increase costs. Even the expansion of preventive services is more likely to increase costs in the short-term and even questionable for savings overall. 

If Obamacare caused a reduction in health care spending for the US population, exactly how was that accomplished? You can give the ACA credit for expanding the insured population and also credit for attempting to change Medicare reimbursement methods, but the end result of the Law’s impact on aggregate health care spending and the rate of increase in that spending is questionable and certainly yet to be established. 

Rather, it remains far more likely that changes in health care inflation are related to general inflation and minimally to direct cost-shifting to patients. 

Remember, nobody was enrolled in an Obamacare plan before January 2014 and prior to that virtually all the new programs and payment changes were limited to the Medicare population. 

I just don’t think we can know what impact the ACA has had on health care inflation rates. 

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