Don’t Panic About Health Spending Projections

Drew Altman: “Rather like a broken record, I have been warning for years that historically low rates of increase in health-care spending would not last. Now it’s time for a different warning: The higher rates of growth now expected are moderate and should be seen in context. Media outlets–especially headline writers–should take care not to dramatize them.”

“The chart above shows why. Whatever the wishful thinking, the slowed rates of 2008 to 2013 did not represent a watershed period when we had some secret formula for controlling growth in health spending; they were an aberration … But the projected 2014-24 growth rate is moderate by historical standards, and a bounce back to the higher growth rates of the past is unlikely given the many changes in the marketplace and in public programs aimed at restraining costs and producing greater value per health-care dollar. The increases in premiums that employers and most Americans pay for group coverage are likely to remain moderate for the immediate future.”

Health Costs Projected to Increase

Wall Street Journal: “Growth in national health spending, which had dropped to historic lows in recent years, has snapped back and is set to continue at a faster pace over the next decade, federal actuaries said Tuesday.”

“The return to bigger growth is a result of expanded insurance coverage under the 2010 health law, a revived economy and crunchtime as Medicare’s baby-boom beneficiaries enter their 70s.”

“American spending on all health care grew 5.5% in 2014 from the previous year and will grow 5.3% this year, according to a report from actuaries at the Centers for Medicare and Medicaid Services published in the journal Health Affairs. In the years through 2024, spending growth is expected to average 5.8%, peaking at 6.3% in 2020.”

Sarah Kliff in Vox: “More health spending is, in one way, a good thing: It reflects more Americans gaining health insurance and seeking out needed medical care as the economy recovers.”

Which is More Lethal: Alcohol or Pot?

Christopher Ingraham: “As marijuana becomes legalized and more inexperienced users try it, some of them will inevitably do stupid things. Some of these stupid things will end in tragedy. But the overwhelming consensus among public health researchers is that marijuana is far less dangerous than alcohol. If you want to get the most bang from your public health buck, the evidence suggests you should work to reduce alcohol consumption.”

Obamacare Has Improved Access to Health Care

Jonathan Cohn points to new research suggesting that since Obamacare’s implementation, Americans have better access to health care.

“It’s one more reason to think Obamacare is not the fiasco that critics claim it to be.”

“In a new paper for the Journal of the American Medical Association, a group of scholars attempt to produce a before-and-after picture of the health care law’s implementation. To do so, they draw on three years of data from Gallup’s ongoing ‘well-being index’ survey.”

The researchers “adjusted the responses for variables like unemployment, in an attempt to isolate the effects of the health care law from other factors, such as the recovering economy. The researchers also looked specifically at the trends — in other words, whether access to care was getting worse before the health care law’s implementation, and, if so, whether that deterioration stopped.”

“Every trend had been getting worse — and then, with the health law’s full implementation, either stopped getting worse or started getting better. Lead author Benjamin Sommers … said the difference amounted to 11 million more adults saying they can afford their health care and 6.8 million reporting they were in good health.”

“The ACA’s first 2 open enrollment periods were associated with significantly improved trends in self-reported coverage, access to primary care and medications, affordability, and health.”

A Modest Increase for Obamacare Rates in California

L.A. Times: “California’s Obamacare exchange negotiated a 4% average rate increase for the second year in a row, defying dire predictions about health insurance sticker shock across the country.”

“The modest price increases for 2016 may be welcome news for many of the 1.3 million Californians who buy individual policies through the state marketplace, known as Covered California.”

“California’s rates are a key barometer of how the Affordable Care Act is working nationwide, and the results indicate that industry giants Anthem and Kaiser Permanente are eager to compete for customers in the nation’s biggest Obamacare market.”

“’California wasn’t the doomsday scenario we had been hearing about,’ said Christine Eibner, a healthcare economist at the Rand Corp., a Santa Monica think tank.”

Exposing the Feeble Attacks on Medicare

Paul Krugman: “Medicare turns 50 this week, and it has been a very good half-century. Before the program went into effect, Ronald Reagan warned that it would destroy American freedom; it didn’t, as far as anyone can tell.”

“The real reason conservatives want to do away with Medicare has always been political: It’s the very idea of the government providing a universal safety net that they hate, and they hate it even more when such programs are successful. But when they make their case to the public they usually shy away from making their real case, and have even, incredibly, sometimes posed as the program’s defenders against liberals and their death panels.”

“What Medicare’s would-be killers usually argue, instead, is that the program as we know it is unaffordable … And then a funny thing happened: [Obamcare’s] passage was immediately followed by an unprecedented pause in Medicare cost growth. Indeed, Medicare spending keeps coming in ever further below expectations, to an extent that has revolutionized our views about the sustainability of the program and of government spending as a whole.”

What Entitlements Crisis?

Paul Krugman: “A few years back elite policy discourse in the United States was totally dominated by the supposed entitlements crisis. Serious people all assured each other that history’s greatest menace was the threat posed by the unstoppable growth of Medicaremedicaidandsocialsecurity, which could only be tamed by dismantling the legacy of the New Deal and the Great Society, while of course cutting top marginal tax rates.”

“In 2009 the Trustees projected a gigantic rise in Medicare spending, which was obviously unsupportable (although Social Security never looked like a big problem). But in the most recent report most of that projected rise has gone away.”

The view from 2015

“The truth is that there never was an entitlements crisis. But now there isn’t even an excuse for pretending that such a crisis exists. I know that a large part of the commentariat is professionally and personally invested in fiscal crisis rhetoric — admitting that it’s no longer relevant would suggest that they have, all along, been silly rather than Serious. But next time you see someone solemnly intoning that we must destroy Medicare to save it, remember that there is no there there.”

Could the Individual Mandate Increase Obamacare’s Popularity?

National Journal: “Those determined to hate Obamacare on principle might soon find themselves rhetorically stuck between a rock and a hard place as enrollment season approaches.”

“In theory, the more people who enroll in the exchanges established under the law, the more stable premiums become. And with the penalty for being uninsured becoming more severe this year, the reason more people might enroll is the individual mandate.

“The mandate is getting harsher, and that is the law’s tool to drive healthy people into the exchanges, which should help moderate premium increases. So one Republican talking point is working against another.”

“‘The individual mandate is the real wild card here. Some people point to the special enrollment period during tax season as an indication that the individual mandate is not looming large in people’s minds. But I think that is not a good test,’ said Larry Levitt, senior vice president at the Kaiser Family Foundation. ‘I think 2016 will be the first real-world test of a tough individual mandate.'”

“Greater exchange-enrollment numbers not only will advance Obamacare’s goal of universal coverage, but also will impact its affordability to those already insured—and, subsequently, its popularity.”

GOP: Obamacare Repeal Plans Are Not Dead

The Hill: “House Majority Leader Kevin McCarthy (R-Calif.) said Tuesday that he is not abandoning hopes of repealing ObamaCare through this year’s budget process even as a key deadline passes this week.”

“McCarthy acknowledged Republicans will miss Friday’s deadline to outline plans for reconciliation, though he dismissed the deadline as more of a guideline than a mandate. ‘We will not put anything out by July 24. It’s not a hard and fast deadline,’ McCarthy said.”

“Momentum for using reconciliation on healthcare legislation has faded after the Supreme Court ruled to uphold ObamaCare last month, enflaming some conservatives who remain committed to sending a repeal of the healthcare law to the president’s desk.”

Medicaid Enrollment Ticks Up

Associated Press: “More than a dozen states that opted to expand Medicaid under the Affordable Care Act have seen enrollments surge way beyond projections, raising concerns that the added costs will strain their budgets when federal aid is scaled back starting in two years.”

“Some lawmakers warn the price of expanding the health care program for poor and lower-income Americans could mean less money available for other state services, including education.”

“In the expansion states, enrollment for Medicaid and a related program for children have increased an overall 28.2 percent compared with a three-month period before the law’s implementation, according to the federal government. In a recent report, economic experts at the U.S. Department of Health and Human Services said they expect estimated enrollment and per-person cost increases to level off and even decline over the long run.”

“Supporters of expanding Medicaid say states will eventually save money by doing away with some of their own services for the uninsured, such as mental and behavioral health programs, and by reducing payments to hospitals and other providers for treatment of the uninsured.”

Aversion to Obamacare Affects Republican Uninsured Rate

Washington Post: “Obamacare has not simply been an ideological victory for the Democratic Party. The percentage of Democrats with health insurance has increased dramatically since the ACA’s marketplace went online in October 2013, according to weekly surveys conducted by YouGov for the Economist. In fact, the display below suggests that Democrats’ uninsured rates have essentially been cut in half under Obamacare.”

“The Republican Party’s uninsured ranks, by contrast, have been much steadier over the past two years. The figure above even indicates that Democrats are now slightly more likely than Republicans to be insured after long trailing behind the GOP in health insurance coverage by wide margins.”

“The more interesting question is whether Democrats’ stronger support for the ACA has led them to sign up for health insurance at faster rates than Republicans who remain overwhelmingly opposed to Obamacare. While establishing the causal influence of partisanship on health insurance coverage is difficult, there are strong reasons to believe that Americans’ partisan attachments have played an important part in their Obamacare enrollments.”

The Reality Behind Projected Obamacare Rate Increases

Sarah Kliff, in Vox, writes that she has talked to “experts about what to expect from Obamacare rates in 2016. And they do expect premiums to rise faster this year, largely because health-care costs are going up faster, too. But they caution against reading too much into the little information currently available — and they don’t expect the huge rate increases making headlines now to be the norm.”

“Health insurers look at dozens of factors when they set rates. They attempt to game out, for example, how much health care they expect members to use, how much they expect health-care prices to rise, and how much their competitors are charging for similar benefit packages. This means there’s a ton of variation in how much premiums rise and fall — and that one insurance plan’s proposal isn’t a great lens into larger trends in the market.”

The Kaiser Family Foundation’s annual report of the rate increases in 11 major cities shows that “the price of a midlevel plan (in more technical terms, the benchmark plan) will increase by an average of 4.4 percent in 2016. That’s a far cry from the double-digit hikes, but still higher than the average of 2 percent in 2015.”

“The more positive reading is that consumers here do have a choice. The individual market isn’t like the employer market where I buy insurance, and where I have exactly one insurance carrier to choose from.”