Study shows Obamacare won't reduce healthcare costs


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Apr 24, 2005
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Health Outlays Still Seen Rising


The health-care overhaul enacted last spring won't significantly change national health spending over the next decade compared with projections before the law was passed, according to government figures released Thursday.

The report by federal number-crunchers casts fresh doubt on Democrats' argument that the health-care law would curb the sharp increase in costs over the long term, the second setback this week for one of the party's biggest legislative achievements.

The Wall Street Journal reported Wednesday that insurance companies have proposed rate increases ranging from 1% to 9% nationwide that they attribute specifically to new health-law coverage mandates.
Democrats signaled they would ratchet up pressure on the companies. "Insurers are using the consumer protections in health reform as a cover for their own greed," said Rep. Pete Stark (D., Calif.), chairman of the House Ways and Means health subcommittee.

Michigan Rep. Dave Camp, the top Republican on that committee, said the rate increases underscore why lawmakers should repeal the legislation and replace it with changes that make care more affordable.

Regardless of the health law, national health spending has been rising in recent years and economists expect that to continue. In February, the federal Centers for Medicare and Medicaid Services projected that overall national health spending would increase an average of 6.1% a year over the next decade.


The center's economists recalculated the numbers in light of the health bill and now project that the increase will average 6.3% a year, according to a report in the journal Health Affairs. Total U.S. health spending will reach $4.6 trillion by 2019, accounting for nearly one of every five U.S. dollars spent, the report says.

"The overall net impact is moderate," said lead author Andrea Sisko, an economist at the Medicare agency. "The underlying impacts on coverage and financing are more pronounced."

The White House said the law will lower costs for insured consumers by removing the hidden price they pay to subsidize the uninsured.

In the next year, spending from private health insurance is expected to grow while out-of-pocket medical costs decline because more people will stay on Cobra insurance coverage for the unemployed, the report said.

The law's early provisions will increase overall health-care spending, the report says, while adding to benefits for consumers. The creation of new high-risk insurance pools, a requirement that children can stay on their parents' insurance plans until age 26 and other early provisions will increase U.S. health expenditures by $10.2 billion through 2013, the report says.

The new projections take into account other factors, including a delay in payment cuts to doctors who treat Medicare patients.

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Getty Images U.S. health spending is projected to rise 9.2% in 2014, up from the 6.6% projected before the law took effect.


U.S. health spending is projected to rise 9.2% in 2014, up from the 6.6% projected before the law took effect. New mechanisms kick in that year to expand insurance coverage. The report estimates 92.7% of U.S. residents will have health insurance by 2019, up from 84% this year.

Once the insurance expansion begins, U.S. health spending is expected to grow slightly more slowly. Between 2015 and 2019, the report predicts, it will increase 6.7% a year on average, down from the 6.8% projected before the overhaul passed.

Out-of-pocket spending is expected to fall sharply starting in 2014 when more people gain insurance coverage through new tax credits and an expanded Medicaid federal-state insurance program. But an excise tax on high-cost plans that takes effect in 2018 will increase out-of-pocket spending as insurance providers reduce their plan benefits to stay below the tax threshold. The law is expected to slow growth in Medicare spending by 1.4 percentage points because it contains lower payments to health-care providers.
Write to Janet Adamy at

Copyright 2009 Dow Jones & Company, Inc. All Rights Reserved
There once was an old king called King Canute,
And he was a very bossy old brute.
“Bring me my crown, and hurry!” he would say,
He told everyone what to do all day.
He said to the queen “I like being the king
And being in charge of everything.”

The queen looked at King Canute, and she laughed.
She said “Not everything, don’t be daft.
You couldn’t command the wind not to blow,
You couldn’t command a tree not to grow.
You’re not in charge of the birds or the bees,
The sun or the moon, the skies or the seas.

“Oh yes I am” said the King, getting cross
“I am, I’ll prove it; I’ll show you who’s boss!”
He called the servants together and then
He bellowed out an order to his men:
“Pick up my throne and take it to the beach,
There is a lesson that I want to teach.”

So they carried his throne down to the ocean
Followed by crowds, there was quite a commotion.
Canute sat on the throne facing the sea
And spoke to it with great authority.
“I am your king and I give this command -
Stay where you are, do not come on this sand”

But the sea didn’t listen to the king.
No-one can stop the tide from coming in.
As the waves kept advancing up the shore
The red-faced king tried to halt them once more.
“I am the King, you must do as I say,
I command you to go back, right away.”

But the waves still came, right up to his feet.
Canute sighed sadly, admitting defeat.
He faced the queen and said “You won the bet
And I have got my royal slippers wet.
I did my best, but no, I came up short.
I guess I’m not as powerful as I thought.”

Unfortunately, people like Obama don't have the ability to admit when they are wrong or accept their limitations as King Canute. Obama and the statists don't have the power to command the supply and demand curves to move or redefine economic law.
Oh WOW, a Murdoch hack at a health insurance industry-friendly rag thinks ACA will cost more and send this country to hell. :sleep:

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