Wednesday, September 25, 2013

Obamacare Bends the Cost Curve—Upward

Obamacare Bends the Cost Curve—Upward

Back in 2008, three eminent Harvard economists who were advising the Obama campaign—David Cutler, David Blumenthal, and Jeffrey Liebman—wrote a memo claiming that Senator Obama’s health-care plan could reduce national health spending by $200 billion a year. As Kevin Sack recounted in the New York Times, the authors of that memo then took that figure, “divided [it] by the country’s population, multiplied for a family of four, and rounded down slightly to a number that was easy to grasp: $2,500.”

Mr. Obama then took that number on the campaign trail, insisting that his health plan would “lower your premiums by up to $2,500 per family per year.”

Last week, the Obama administration’s Centers for Medicare and Medicaid Services issued a rather different prediction: that “the [Affordable Care Act] is projected to . . . increase cumulative spending by roughly $621 billion” from 2014 to 2022. To be clear, that’s spending on top of the normal health-care inflation that would have happened if Obamacare had not been passed. So much for “bending down the cost curve,” as the president often liked to say his law would do.