Today, the Associated Press and National Public Radio reported on a new study by the federal government that suggests that the rate of growth in health care spending has slowed. Health care spending was up 3.9 percent in 2011 from the year before–still somewhat higher than inflation (3.4%), but relatively low. Health care spending had increased 3.8 percent in 2010.
Both the AP and NPR proclaimed that the new study by the Center for Medicare and Medicaid Services “provided relief for a jittery White House facing a 2012 reelection campaign in which President Barack Obama’s health care overhaul is a top target for Republicans.” NPR went even further on its health news blog, stating that the new study contradicted Republican claims that ObamaCare would increase health care costs.
The study found that health care spending was largely independent of ObamaCare, because most of its provisions have not been implemented yet. But neither AP nor NPR bothered to comment on President Obama and Democrats’ claims that ObamaCare would “bend the cost curve down.” They simply singled out Republicans.
Moreover, health care costs and health care spending are not the same thing. The laws of supply and demand indicate that as the cost of health care rises, less health care would be purchased, even though demand for some kinds of health care (e.g. emergency care) might be fairly inelastic. Therefore a drop in spending on health care could be, and probably is, consistent with a rise in health care costs.
Predictions of rising costs and rising spending haven’t just come from Republicans. In April 2010, the Center for Medicare and Medicaid Services’s own actuary, Richard Foster, predicted that ObamaCare would increase both.
In May 2011, Pricewaterhouse Coopers released a report suggesting that health care costs were likely to continue rising despite ObamaCare–and also predicting that the slow economy might suppress that trend through 2012.
In September 2011, a Kaiser Family Foundation study found that the cost of health insurance was continuing to rise–and that while ObamaCare might not have been the major cause of the increase, it could have contributed to it.
The bias in the AP and NPR reports is evident from the fact that the AP report ignored the overwhelming evidence of rising health care costs and spending and rushed to draw political conclusions from the new study–which, it is worth pointing out, actually shows a slight increase in the growth of health spending from the year before, even if both rates are historically low.