No grounds for claim that ObamaCare lowers healthcare costs

This of course does not prove that the ACA is doing nothing to lower health costs. The ACA contains some provisions (e.g., those expanding health coverage) that clearly increase health care costs, as well as other provisions aimed at reducing costs. Reasonable people can argue over which effect will be larger in the long run. Reasonable people can even debate what has transpired to date. But no one can rightly claim that CMS has revised their near-term cost projections downward because of the ACA. That is simply false.

A recent White House CEA report is much more careful in promoting the impression that the ACA is slowing health cost growth. It fairly notes that health spending has slowed (true), that slower health spending growth carries budgetary and economic benefits (true), that the causes of the slowdown are “not fully understood” (true), and that the ACA contains provisions designed to slow cost growth (true). The report also argues (reasonably) that other recent changes in the health care sector, such as increased patient cost-sharing and expiration of drug patents, are by themselves insufficient to explain the cost slowdown. Neither is the Great Recession the full explanation, CEA argues, because the health cost slowdown has outlasted it. Largely by process of elimination, CEA encourages the belief that a root cause of cost-reduction is the ACA “really, really working,” in the words of one especially credulous reader.

But CEA’s case for crediting the ACA is extremely weak. …