November 09, 2014
Washington Post Fact Checker gave President Obama three Pinocchios for claiming in a press conference that the Affordable Care Act was responsible for the slowdown in health care costs overall and the slowdown in Medicare costs in particular. This seems more than a bit harsh.
First, there are some clear misstatements, Obama referred to savings on Medicare and Medicaid, even though he just said “Medicare.” Also, he was referring to projected savings in 2020, even though his comments implied that these were the savings that we are seeing today. However these were off the cuff comments in a press conference, as Kessler notes. In prepared speeches Obama has presented these number accurately.
However Kessler’s main complaint is that Obama seems to be implying that the ACA is responsible for the slowdown in health care cost growth when at most it was an important contributor. The point is reasonable, but the question is whether this is a three Pinocchio misrepresentation.
After all, the vast majority of health economists do believe that the ACA has been an important factor in slowing cost growth. The main competing explanation is the recession. That is a plausible explanation for slowing growth in 2008, 2009, and possibly even 2010, but it really is not plausible in more recent years. People may put off care when they lose their jobs, which would explain a one-time reduction in cost growth. However this can’t explain continued slow growth. After all, we don’t think more people are putting off care in 2014 than in 2010.
Furthermore, health care cost growth has continued to undercut projections even in more recent years when the projections were made with the full knowledge of the recession. In this respect, it is worth noting Kessler’s reference to a projection that health care costs in 2014 would rise 5.6 percent from their 2013 level. In the first three quarters of 2014, spending on health care services (roughly 90 percent of spending) is up by 2.8 percent from 2013 levels. Plausible projections of fourth quarter spending are likely to push the year over year increase slightly above 3.0 percent, but this is still well below the growth rate that was projected last year.
It is fair to call President Obama on the carpet for claiming the ACA did more to contain costs than is actually the case, but can anyone doubt that if health care costs had risen more rapidly than in the past that the ACA would get the blame in the public mind, even if other factors were clearly more important? In the context of modern politics, President Obama’s claims about the cost-savings from the ACA seem like relatively minor exaggerations, not a three Pinocchio offense.
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