Oh, the tragedy! Oh, the horror! Behold, for the horns of Gabriel shake the Heavens, and lo, the Earth opens to swallow the unrighteous! This is a dark day, indeed…for FOX. Despite dire predictions of economic collapse, and despite some initial chuckles and snarls at it and Obama’s expense, The Affordable Care Act’s first cost figures are in — and they’re billions lower than predicted. Thank God, FOX has a solution.
In an article released on December 2nd, The New York Times reported that both the Congressional Budget Office and private analysts have concluded that the Affordable Care Act would wind up costing about $150 billion dollars (in insurance premiums and Medicaid expansions) less than was originally predicted. Harvard economist and former Obama adviser David M. Cutler, like many others, believes that the former analysts are underestimating the impact of present economic factors, and that savings could be as much as $750 billion by 2020. The reasons are many, but the ACA itself is at least partially to thank for its own cost reduction.
According to the fairly non-partisan and objective Kaiser Family Foundation, about 75% of the savings come from the drop in healthcare spending resulting from the Bush Recession. Self-destructing economies like the one Dubya left us with in 2009 have a way of driving healthcare expenditures down, in much the same way that they drive oil prices down. The fact that 25 states have opted out of the Medicaid expansion will save a further $45 billion or so by 2016 if they continue to opt out, though that’s pretty unlikely.
So, the fact that growth in annual healthcare spending is only going up by about 1.8% per person per year (rather than the 5% per person, per year in 2003) is partly to thank for the savings — but economists rightly predict that this most unfortunate component of the savings won’t last. At least as long as the economy continues to pick up. But what about the other 25 percent?
The other 25% of savings, currently projected to amount to something between $35 and $220 billion by 2020, is due to the ACA itself. With its 80/20 insurance expenditure mandate, the ACA directly forces insurance companies to spend money on things like healthcare, rather than antigravity sapphire-unobtanium codpieces for insurance company CEOs.
The ACA, as it’s written, also rewards quality of care rather than quality, which helps to ensure that doctors and hospitals provide initial care and follow-up care, keeping people healthy and cutting down on re-admissions. For example, the ACA might encourage hospitals to treat an infected tooth with good IV antibiotics and the best prescriptions available, rather than sending patients home with a note for the cheapest pills available. Proper care, and treating ailments proactively prevents sickness, which cuts costs later.
Quoth Larry Levitt of the Kaiser Family Foundation, even if only 25% of the savings arise from the law itself, as opposed to current economic factors, then “that’s real change in the health system.”
Obviously, the Right isn’t about to give the Black Devil his due just yet…oh, no. Charles Blahous, a former (brace for shock) Bush administration official called the claims of savings as
“groundless as the ones that misled so many Americans to believe they would be able to keep their previous coverage.”
Clearly, that was before Obama proposed a fix that would allow people to keep their coverage. But, fair enough. The critics are correct when they say that we’ll see a drastic increase in spending next year after the bills come due for an extra nine million Americans projected to sign up under the Medicaid expansion. Which will still be less than the projected savings. Fortunately, FOX already has a solution to the coming Armageddon that doesn’t exist.
Two days after the savings were projected, FOX “News” ran a story from the conservative tabloid Washington Examiner on the Republican “alternative” to the Affordable Care Act.
If the “Empowering Patients First Act,” which some have said would save $2.34 trillion, sounds vaguely familiar, it’s because you might have heard it mentioned — four years ago. The bill, sponsored by Rep. Tom Price of Georgia, essentially counts on the invisible hand of the free market to do the right thing, shifting the insurance burden more to employers and less on the taxpayer. Price says the plan will cover people with pre-existing conditions, though nothing in the bill’s wording agrees with him. Hey, it happens when someone else writes your bills for you.
Price also proposed bringing down premiums by putting a cap on defensive medicine (ordering potentially unnecessary tests and treatments) and pushing for reform in medical malpractice. Effectively, the bill protects insurance companies by promising that they won’t have to pay for what THEY deem to be “unnecessary tests,” and puts a cap on how much they can lose in a malpractice suit.
Of course, FOX is very excited about the “alternative.” Everyone else in Congress…not so much.
When it was analyzed back in 2009, non-partisan groups found that not only would Price’s grand plan NOT save trillions of dollars, it would end up COSTING taxpayers over $100 billion. That’s a pretty healthy bump for a plan that was ostensibly designed (presumably, by AETNA) to save money, and save money only. In short, Price’s plan would do absolutely nothing to increase quality of healthcare, but would effectively funnel about $100 Billion right into the pockets of health insurance companies.
So…yeah. FOX is a big fan.
In the House, though, the bill was effectively DOA. It’s was too shady and clearly capitalist pandering for Democrats, who supported the ACA by default; and Republicans rejected it because it was TOO progressive. And because it didn’t contain a rider that allowed them to hunt the poor for sport. If it came up for a vote today, Price’s plan would die just as quickly as it did years ago.