Even before the Affordable Care Act became law, about 90 percent of the conversation and criticism of it was about coverage. Little has been said about its ability to control costs.
March 23, the ninth anniversary of the ACA’s passage, presents a good opportunity to examine its legacy on cost control — a legacy that deserves to be in the foreground, not relegated to the background behind the exchanges, Medicaid expansion, and work requirements.
One month after the ACA had passed, the Office of the Actuary of the Department of Health and Human Services projected its financial impact in a report entitled “Estimated Financial Effects of the ‘Patient Protections and Affordable Care Act’, as Amended.” The government’s official record-keeper estimated that health care costs under the ACA would reach $4.14 trillion per year in 2017 and constitute 20.2 percent of the gross domestic product (GDP).
Fast forward to December 2018, when that same office released the official tabulation of health care spending in 2017. The bottom line: cumulatively from 2010 to 2017 the ACA reduced health care spending a total of $2.3 trillion.
Related:
Coverage for pre-existing conditions lives on, even though the Affordable Care Act seemed doomed
In 2017 alone, health expenditures were $650 billion lower than projected, and kept health care spending under 18 percent of GDP — basically a tad over where it was in 2010 when the ACA was passed. It did all of this while expanding health coverage to more than 20 million previously uninsured Americans.
Compared to the 2010 projections, the government’s Medicare bill in 2017 was 10 percent ($70 billion) less, and spending for Medicaid and the Children’s Health Insurance Program was a whopping $250 billion below expectations (partially — but only partially — due to the failure of some states to expand the program). The actuary had predicted in 2010 that employer-sponsored insurance would cost $1.21 trillion in 2017, but it came in at $1.04 trillion, a difference of $170 billion for that year.
Put another way, health care spending in 2017 was $2,000 less per person than it was projected to be. And for the 176 million Americans who have private employer-sponsored insurance, their lower premiums averaged just under $1,000 per person.
Barack Obama pledged on the campaign trail and as president that he would sign a health care bill that lowered family health insurance premiums by $2,500. Conservative politicians and pundits roundly mocked him. Yet the ACA has more than delivered on that promise, saving about $4,000 per family. And these lower health care premiums probably contribute to the recent rise in workers’ wages.
One reason the ACA’s enormous success in cost control goes unappreciated is that no one experiences the difference between projections and reality. What could have happened is intangible. All we feel is what actually happens.
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https://www.statnews.com/2019/03/22/affordable-care-act-controls-costs/
March 23, the ninth anniversary of the ACA’s passage, presents a good opportunity to examine its legacy on cost control — a legacy that deserves to be in the foreground, not relegated to the background behind the exchanges, Medicaid expansion, and work requirements.
One month after the ACA had passed, the Office of the Actuary of the Department of Health and Human Services projected its financial impact in a report entitled “Estimated Financial Effects of the ‘Patient Protections and Affordable Care Act’, as Amended.” The government’s official record-keeper estimated that health care costs under the ACA would reach $4.14 trillion per year in 2017 and constitute 20.2 percent of the gross domestic product (GDP).
Fast forward to December 2018, when that same office released the official tabulation of health care spending in 2017. The bottom line: cumulatively from 2010 to 2017 the ACA reduced health care spending a total of $2.3 trillion.
Related:
Coverage for pre-existing conditions lives on, even though the Affordable Care Act seemed doomed
In 2017 alone, health expenditures were $650 billion lower than projected, and kept health care spending under 18 percent of GDP — basically a tad over where it was in 2010 when the ACA was passed. It did all of this while expanding health coverage to more than 20 million previously uninsured Americans.
Compared to the 2010 projections, the government’s Medicare bill in 2017 was 10 percent ($70 billion) less, and spending for Medicaid and the Children’s Health Insurance Program was a whopping $250 billion below expectations (partially — but only partially — due to the failure of some states to expand the program). The actuary had predicted in 2010 that employer-sponsored insurance would cost $1.21 trillion in 2017, but it came in at $1.04 trillion, a difference of $170 billion for that year.
Put another way, health care spending in 2017 was $2,000 less per person than it was projected to be. And for the 176 million Americans who have private employer-sponsored insurance, their lower premiums averaged just under $1,000 per person.
Barack Obama pledged on the campaign trail and as president that he would sign a health care bill that lowered family health insurance premiums by $2,500. Conservative politicians and pundits roundly mocked him. Yet the ACA has more than delivered on that promise, saving about $4,000 per family. And these lower health care premiums probably contribute to the recent rise in workers’ wages.
One reason the ACA’s enormous success in cost control goes unappreciated is that no one experiences the difference between projections and reality. What could have happened is intangible. All we feel is what actually happens.
...
https://www.statnews.com/2019/03/22/affordable-care-act-controls-costs/
