Thanks, Obamacare! Health Care Cost Growth Shrinks, Again

Not only has the Affordable Care Act embarrassed national media and right wing doomsayers by blowing through its enrollment estimates and saving our economy from contracting in the first quarter of this year, but to the surprise of exactly no one who's examined the Affordable Care Act honestly and without partisan or ideological lenses, Obamacare continues to meet and exceed its goal of keeping costs down, recent data shows.

For a long while, even as the Affordable Care Act has been effective in keeping growth of health care costs at historic lows, pundits and Obamacare's detractors have refused to give the ACA any credit, saying that health care spending growth is down because of the soft economy. That argument grows spurious everyday as the economy grows stronger and as more and more people gain health insurance, lessening the need to hold back or put off medical expenditures.

There has of course been an increase in total spending as the market absorbs millions of new health insurance enrollees who are able to actually accrue health care expenses for the first time in a long time, if not for the first time ever. But the ACA has been remarkably successful in keeping per capita spending growth down, as well as arresting the growth of health care prices. For the first time in half a century, health care price growth is now matching overall price inflation (as it has been since the Obamacare began its long implementation process).

Not only did actual prices for health care services grow at less than 1% last year, the growth rate in per-enrollee spending (judged by insurance claims) fell in 2013 to 3.5% from the previous year's 4.9% growth rate, a drop of nearly a third.

And employer premiums? For all the bruhaha about Obamacare was going to make employer health care expenses explode and drive businesses out of business, the reality was markedly different.

In April, the human resources services firm Automatic Data Processing (ADP) released estimates of 2014 premiums for large employers based on data for large companies for which ADP administers health benefits. The total premium in the plans examined by ADP grew just 1.7 percent from 2013 to 2014, compared to 3.1 percent from 2012 to 2013.

The greatest cost benefit of Obamacare, it seems, is being enjoyed by Medicare. Per-beneficiary spending in Medicare is actually down (that's not rate of spending growth, it's actual spending), and by a significant amount.

These are incredibly significant numbers. I have said it before, and I will say it again: anyone who cares about coverage must pay attention to cost. Not because cost overrides coverage, but because out of control cost growth can make coverage much more difficult to achieve.

Every step of the way, the Affordable Care Act has proven to be an unqualified success. For anyone who cares about facts, it has proven naysayers - on both sides of the political isle - wrong.

In fact, the single point of agreement among the liberal and conservative detractors of the ACA was the idea that it couldn't successfully arrest rising costs. Conservatives argued that it would make cost explode because of its various mandates and regulations (because an unregulated insurance marketplace has worked so well in reining in costs), and liberals argued it didn't have enough regulations and mandates to arrest the costs (according to them, nothing short of eliminating insurance companies would do that).

Yet, here we are. Cost curve is down, coverage is up, and America is a better place because we elected a president with the courage to do what is right.



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