No, Obamacare Does Not Lower Health Care Spending
Alyene Senger /
Obamacare supporters tend to give credit to the law where credit is not due. In the latest attempt, Senate Budget Committee Chairman Patty Murray (D–WA) tried to link lower projections for Medicare and Medicaid spending to the Affordable Care Act.
During today’s hearing on the recent Congressional Budget Office (CBO) report, Chairman Murray said:
As I was reading through the report, one section really got my attention …which was the discussion of the change in health spending in recent years. In fact, I stopped and underlined one statistic because I found it so surprising. The statistic is that CBO has lowered its estimate of federal spending for Medicare and Medicaid to such a degree that spending for 2020—one year is now $200 billion lower than CBO thought back in 2010, an improvement of 15 percent.
And let’s be clear, that improvement has occurred since enactment of the Affordable Care Act.
It is unfortunate that Chairman Murray didn’t keep reading because the very next paragraph of the report states:
Spending projections also have been affected by legislative action—most notably as a result of the Affordable Care Act…. From 2010 to the present, those other types of revisions boosted the estimates of outlays for Medicare and Medicaid in 2020 by $72 billion, or about 5 percent. (The Affordable Care Act also created new subsidies for some people to purchase health insurance through exchanges, adding $115 billion to the estimate for federal outlays for health care programs in 2020, according to CBO’s current projections.)
So spending is estimated to decrease for Medicare and Medicaid in 2020 by $200 billion but Obamacare spends an extra $187 billion more than would have been spent in the absence of the law. Thus, whatever “savings” were projected have been gobbled up by Obamacare and its massive new spending.
And don’t let the CBO’s estimate distract from the major issue of health spending. As Heritage pointed out last week, in just two years, “[s]pending on Medicare, Medicaid, Obamacare subsidies, and the Children’s Health Insurance Program will be greater than all other spending—including Social Security and defense spending.” Obamacare alone contributes $1.6 trillion over the next 10 years towards this huge problem.
Furthermore, a future decrease in Medicare spending is contingent upon the continuation of Obamacare’s $716 billion in Medicare cuts—which is unlikely. In 2020 alone, payments to Part A providers are estimated by the CBO to be reduced by $75 billion. Lowering provider reimbursement rates to Obamacare’s levels will have severe impacts on seniors’ ability to access care, which is already being seen. Congress is likely to override these cuts to protect Medicare beneficiaries, much like they do with Medicare physician payment rates each year.
The bottom line is that Obamacare does not decrease spending on health care, no matter which pieces of information Chairman Murray leaves out.