Remember when Barack Obama promised that his health-care overhaul would “bend the cost curve downward” and arrest rapid increases in costs? The Wall Street Journal has an advance look at a report from the federal government that shows no slowing in costs to the government as a result of the ObamaCare bill. In fact, the analysis will show that the bill’s passage actually results in an increase in outlays over what had been projected for the next decade:
The health-care overhaul enacted last spring won’t significantly change national health spending over the next decade compared with projections before the law was passed, according to government figures set to be released Thursday.
The report by federal number-crunchers casts fresh doubt on Democrats’ argument that the health-care law would curb the sharp increase in costs over the long term, the second setback this week for one of the party’s biggest legislative achievements. …
Regardless of the health law, national health spending has been rising in recent years and economists expect that to continue. In February, the federal Centers for Medicare and Medicaid Services projected that overall national health spending would increase an average of 6.1% a year over the next decade.
The center’s economists recalculated the numbers in light of the health bill and now project that the increase will average 6.3% a year, according to a report in the journal Health Affairs. Total U.S. health spending will reach $4.6 trillion by 2019, accounting for nearly one of every five U.S. dollars spent, the report says.
“The overall net impact is moderate,” said lead author Andrea Sisko, an economist at the Medicare agency. “The underlying impacts on coverage and financing are more pronounced.”
Here is the chart of the day:
The Journal reported earlier this week that insurers have already begun raising premiums in response to the front-loading of ObamaCare benefit mandates by the White House. That report sent Democrats into fits of anger, threatening to “ratchet up pressure” on insurers. Rep. Pete Stark (D-CA) blamed “greed” for price increases instead of the higher costs imposed by the mandates — a completely predictable consequence of adding more mandates to insurance coverage.
Perhaps these same Democrats can put pressure on themselves to explain once again how the higher costs in ObamaCare meets their promise of bending the cost curve downward. Not only does the cost curve literally go upward more under ObamaCare for overall spending as percentage of GDP in comparison to the pre-ObamaCare trajectory, it consistently pushes it upward for private insurance, and especially Medicaid. It only bends downward for Medicare and slightly downward for out-of-pocket costs for consumers.
Medicare’s trajectory does look slightly better under ObamaCare, but there’s a reason for that. The slowdown comes from lower reimbursement rates for Medicare services, which means it comes out of the pockets of doctors. The result will be fewer participating providers in Medicare, which will mean longer wait times, more difficulty in getting treatments, and most likely higher out-of-pocket payments as those consumers pay retail for their medical care more often.
ObamaCare fails to deliver on its promise in yet another way, and this is only the beginning.