Premiums, National Health Spending, and the Affordable Care Act: No. Nothing Coming Out of the American Enterprise Institute Should Be Trusted Before It Is Carefully Vetted and Verified. Why Do You Ask?
AEI's Chris Conover claims that, because total national health spending is going to be higher than baseline as a result of the ACA, it is not possible for the premiums paid by those who purchase health insurance to be going down as a result of the ACA. Say what? Right now the premiums of those who buy insurance pay for a lot of the uninsured's medical care. If you broaden the base by insuring more people, you lower the rates that those who are insured and pay for the system pay.
Of course, nobody at the AEI will point out that Conover is either--at best--confused, or is simply saying things he knows are not true.
Obedience to their political masters, after all, rules on 17th St. Informing the public and raising the level of the policy debate doesn't.
Houghton Houghton: Nauseating Health Care Idiocy Chris Conover of AEI and Forbes:
A non-blogging friend points me to this new article at Forbes by Chris Conover purporting to show that the "typical family of 4" will see its health care spending rise by $7450. He quotes the Center for Medicare and Medicaid Services (CMS), saying:
in its first ten years, Obamacare will boost health spending by "roughly $621 billion" [that's the CMS quote] above the amounts Americans would have spent without this misguided law….
This is not $7450 per year, but over the entire 10-year (or more likely 9-year; he usually refers to 2014-22) period…. $207 per capita higher spending per year… in 2011 the United States spent $8174.90 per person on health care….>Second, Conover doesn't understand present value. He writes:
Of course, all these figures are in nominal dollars. In terms of today’s purchasing power, this annual amount will rise steadily.
Of course, it is just the opposite. A dollar in 2022 is worth less than a dollar today. In 2013 dollars, the amount is less than $207 per person per year….
Think Progress's Igor Volsky is completely right when he quotes Paul van der Water of the Center on Budget and Policy Priorities that none of this will apply to the "typical American family" because that family gets its insurance at work. More money will… be spent over time but… [not] at the center of the health insurance distribution….
What [Conover] says is impossible[:]…
It’s simply not possible for national health spending to rise by $621 billion and for the “typical” family to expect a $2500 (per year!!!!) premium reduction….
The increase in health spending is being funded in ways that don't come out of individual health care spending….
By 2022, according to the CMS report Conover cites, 30 million more people will have insurance than would be the case without Obamacare. While many of those people will be receiving subsidies, a lot of them will be paying something for their insurance….
Forbes' most-read story of the day (with over 26,000 Facebook shares and 3400 tweets as I write this) is simply false.