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The Bill Comes Due

Remember all that talk about how Obamacare was going to save us all this money? Evil uncaring heretics like me pointed out that this was impossible. You can not insure more people and you can not outlaw cheap insurance without increasing healthcare costs. Romneycare saw costs soar after implementation because … funny story … when people have insurance they see the doctor more often. Even the dreaded ER visits went up.

But no, we just didn’t understand. We were letting our hatred of poor people cloud our vision. Why the cost curve bent down in 2009-2013, which was proof that Obamacare was keeping costs down even before it was implemented!

Um … oops:

As I reported earlier this month, there were already signs of growing health care spending in the fourth quarter of 2013, when it jumped 5.6 percent, which had been the fastest clip since 2004.

But the 9.9 percent jump (on an annualized basis) came in the quarter from January through March, which was the first three months in which individuals who gaining coverage through the law were able to use it. That was the fastest rate recorded since health care spending grew at a 10 percent rate in the third quarter of 1980.

The data released on Wednesday, as part of the government’s report on gross domestic product, is preliminary and subject to revision in the coming months.

Note that first quarter GDP growth came in at 0.1%, so the non-healthcare section of the economy shrank by 1% last quarter.

So … are the Obamacare supporters admitting that they were wrong? Uh, not exactly:

But let’s be very clear about what’s happening here: an improving economy is allowing Americans to now spend more on health care, while people who have previously been uninsured are finally getting insurance and are using their care. In the meantime, health care prices are still continuing to grow at low rates, reducing Americans’ health costs.

ThinkRegress goes on to say that, in the long run, healthcare costs will come down because the IPAB will force changes in healthcare reimbursement. Therefore we should be celebrating because the first half of the CBO’s prediction — healthcare costs will rise — has come true!

There are many many problems with this. The biggest is history. IPAB is not the first effort by the government to reign in healthcare spending. There is a whole alphabet soup of programs — RBRVS, GRH, SGR, etc. — that have completely failed in this regard. And that leads to the bigger point. Those of you who have followed the budget debates for the last twenty years know how this plays out: we get spending increases today with the promise of spending cuts tomorrow to balance them out. And those spending cuts never happen. Because tomorrow we are told that spending needs to go up because of the economy, the uninsured, the homeless or Venus being in Taurus.

So what will the Democrats and their apologists say when health care costs continue to rise? Well, besides blaming Republicans, I expect they will claim that this “proves” how much we need single-payer. To prepare for that, read McArdle today. Over the last twenty years, uber-controlled monopsony single-payer healthcare systems have restrained their spending growth to … about what we’ve had in the United States. The big growth in US healthcare spending occurred forty years ago and is now baked into the system. So … no, Virginia, socialized medicine will not cure what ails us.

Buckle your seat belts, friends. The ride’s only going to get bumpier.

8 comments

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  1. AlexInCT says:

    Remember all that talk about how Obamacare was going to save us all this money?

    I remember a shit-ton of lying and obfuscation of the facts by people that knew damned well they were lying, if that’s what you mean. And the only people that ever bought the lie that Obamacare would do anything other than drastically raise the cost of healthcare, crash the quality of care in the US for everyone enslaved by this government healthcare takeover, and reduce access to care, are people that are too stupid to live. They are the same idiots that fall for the Nigerian oil prince has money for you, or you won the Spanish or Australian lottery, despite never entering either, scams.

    My personal costs have close to doubled since this shit went into law, and even worse, they look like they are going to keep climbing. I pay more out of pocket, more for the plan, and in the future I will be paying a lot more for shit I will never need. Obamacare’s purpose was never, ever to reduce costs, fix healthcare, or even provide coverage to the uninsured. It’s real purpose was to sabotage the healthcare system so the collectivists could keep their plan to force all of us to become dependent on government owned by them in their new collectivist revolution by slow boil plan.

    We only stop them with another revolution now.

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  2. CM says:

    Because everything with the words “health care” in it have been intensely politicized since 2009 when Congress started writing what eventually became the Affordable Care Act, every number that comes out has a tendency to be overanalyzed, and people on the left and the right have a tendency to draw grand conclusions from what can be pretty meager, preliminary information.

    Case in point: Obama himself. The White House has been promoting analyses, both its own and from outsiders, that gave more credit to Obamacare for the recent slowdown in health care spending than the Medicare and Medicaid actuaries or lots of other experts. Now that the trend may be reversing, it’s giving critics of the law an opportunity to say, “I told you so!”

    It’s going to be long time before anyone gets to say that and be sure they’re right.

    http://www.huffingtonpost.com/2014/04/30/health-care-spending_n_5241322.html

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  3. Hal_10000 says:

    CM, that was in the Think Regress article I linked. I stand by what I said: spending is increasing now, future spending restraint is speculative (and CBO has specifically warned it might not happen).

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  4. CM says:

    Seems to me that there is an important difference between ‘spending’ and ‘costs’……it makes sense that people will ‘spend’ more on healthcare if it actually become available to them…..whether that healthcare is more expensive than it was previously is something different (i.e. did the price actually rise?). But I realise I’m not saying anything that everyone doesn’t already know. It’s just that in these links the terms seem to be interchangeable (and even you talk about the ‘costs’ coming down but then say ‘oops’ and quote about spending).

    Often if the cost of something goes down, spending can go up. So the CBO warning might be right, but that might be because of the combination of costs going down or staying the same, and more people being able to afford to spend money (because of greater access and an improving economy).

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  5. Hal_10000 says:

    Well, one word of caution to keep in mind: the predicted rise in healthcare spending was lower than what we actually got. THat doesn’t exactly bode well for the future.

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  6. CM says:

    Surely it’s costs that matter though. Spending can be about costs,but also about other factors (as mentioned).
    If a burger combo i like at a place 5 miles away is $10, I might buy one a month. But if they put it down to $8, or they open a store closer, or I get a pay-rise, or any combination of those things, I might buy 2 or 3 a month. Overall the costs may have reduced or stayed the same, but my spending on it will have rocketed. If they put the price up to $11 but they build a new franchise right across the street then I’m still likely to buy more than one a month.

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  7. Xetrov says:

    And if they start stuffing the burger with bullshit, how many are you likely to buy then?

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  8. CM says:

    None. Spending plummets!

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