Obamacare’s Secret Success
By PAUL KRUGMAN @ The NY Times…..
Much of the Beltway establishment scoffed at the promise of cost savings. The prevalent attitude in Washington is that reform isn’t real unless the little people suffer; serious savings are supposed to come from things likeraising the Medicare age (which the Congressional Budget Office recently concluded would, in fact, hardly save any money) and throwing millions of Americans off Medicaid. True, a 2011 letter signed by hundreds of health and labor economistspointed out that “the Affordable Care Act contains essentially every cost-containment provision policy analysts have considered effective in reducing the rate of medical spending.” But such expert views were largely ignored.
So, how’s it going? The health exchanges are off to a famously rocky start, but many, though by no means all, of the cost-control measures have already kicked in. Has the curve been bent?
The answer, amazingly, is yes. In fact, the slowdown in health costs has been dramatic.
O.K., the obligatory caveats. First of all, we don’t know how long the good news will last. Health costs in the United States slowed dramatically in the 1990s (although not this dramatically), probably thanks to the rise of health maintenance organizations, but cost growth picked up again after 2000. Second, we don’t know for sure how much of the good news is because of the Affordable Care Act.
Still, the facts are striking. Since 2010, when the act was passed, real health spending per capita — that is, total spending adjusted for overall inflation and population growth — has risen less than a third as rapidly as its long-term average. Real spending per Medicare recipient hasn’t risen at all; real spending per Medicaid beneficiary has actually fallen slightly.
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