(Bloomberg View) — In recent years, health care cost growth has slowed down. This is great news for the federal budget, and for those of us who, you know, get health care occasionally. Unfortunately, researchers from the Centers for Medicare & Medicaid Services (CMS) project that the good news may be over. With the population aging, the economy recovering, and the Patient Protection and Affordable Care Act (PPACA) — Obamacare — expanding coverage, they expect health care cost growth to average almost 6 percent over the next decade.
That’s not all bad news. The population is aging because people are living longer. And economic recovery will give us more income to pay our higher health care costs. The newly insured are presumably pretty happy about it too. So there’s no reason to go into paroxysms of mourning over this news. However, it does cast light on a debate that has been going on for some time: why growth in health expenditures has gone down.
Supporters of Obamacare think they have an answer: Obama! In this narrative, President Obama came into office, the government did a lot of good stuff with health care regulation, and finally, after long years, costs began to fall.
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This was never a particularly plausible narrative, because costs began falling during the Bush administration. They fell a lot in 2008, floated around between 3.5 percent and 4 percent from 2009 onward — and according to CMS, will now start rising back toward 6 percent for the next 10 years. To believe that Obama caused the drop, you have to believe that and other administration initiatives are so amazing that they made health care costs fall dramatically before Obama was even elected, and rise as Obamacare took full effect. That would be … weird.