Posts Tagged ‘ affordable care act ’

The Wall Street Journal and “Obamacare”

It  always really disappoints me when I see ideologically biased, dishonest journalism on display. Today, Stephen Moore wrote a post in the Wall Street Journal . It reads in part:

ObamaCare Doesn’t Add Up

A new CBO report finds that the costs of Medicare and Medicaid will drive federal spending to all-time highs in coming decades. (1)

What is conspicuously missing from this report is the magical windfall from the new health law. CBO reports that it is “using the same growth rates that would have been applied in the absence of the legislation.” Now they tell us. Hence, Medicare alone is projected to nearly double over the next 25 years, from 3.7% of GDP to almost 7% by 2035. (2)

CBO warns that ObamaCare’s purported payment cuts to doctors and hospitals and the hoped-for reductions in the growth of the insurance subsidies would be “difficult to sustain over a long period.” Let us translate all this mumbo jumbo: The ObamaCare cost savings are mostly bunk. (3)

None of these scary trends is inevitable, and there is still time to get health-care costs contained. But now even CBO seems to agree that ObamaCare bends our health-care bills up, not down, in the long run. (4)

Stephen Moore seems to either completely miss (or just selectively misrepresent) the point of the CBO report. (For clarification, the CBO is the Congressional Budget Office, the non-partisan scorekeeper for all Congressional laws and bills) Let’s go point-by-point:

(1) To start, if there seems to be some tension between the headline and the sub-head its because the sub-head is mostly true while the headline is all sensational. The bills for Medicare and Medicaid will increase in the coming years because health care costs as a whole will increase. If healthcare for everyone else is increasing at a breakneck pace, its only natural that healthcare for the elderly, disabled, young and poor will also increase considerably. Of course, that has nothing to do with “Obamacare,”  which is what the headline leads you to believe.

(2) When the CBO says it is “using the same growth rates that would have been applied in the absence of the legislation,” its saying that it is using those growth rates as a baseline  and then it will “incorporate the projected effects of the legislation on the level of federal spending for health care”  as they affect the baseline they established. Somehow, surely by accident, Moore quoted the CBO out off context so he could make an ideological point not represented by the evidence. Either that, or he was commenting on a report he could not understand.

(3) In one of the two scenarios the CBO presents, it assumes that all the cost savings contained in the Affordable Care Act (ACA) will keep costs down for the coming decade, but then after that, they will prove “difficult to sustain.” Moore thinks this means “the ObamaCare cost savings are mostly bunk,” but the CBO doesn’t. It still projects that the ACA will save money for a decade but thinks that after that a future Congress will vote to spend more money to override some of the savings.

(4) Finally, Moore says that “even CBO seems to agree that ObamaCare bends our health-care bills up.” That is NOT what the CBO says. In the more pessimistic scenario the CBO says that “excess cost growth” in Medicare will drop 88 percent in the first decade of the ACA compared to what it was from 1985-2007. Thereafter, Medicare’s excess growth will still be 25 percent lower than it was before. (pgs 43, 45) Even if everything goes wrong with the law that the CBO thinks may go wrong with it, it will still save money (bend the cost curve down), according to the CBO.

In conclusion, the CBO’s conservative scenario projects that the ACA will save money and everything in this article is a distortion or misrepresentations of what the CBO says.

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