White House: O-Care has cut health cost growth

Senior White House officials on Tuesday said consumers and businesses are seeing healthcare costs rise more slowly thanks to ObamaCare.

In a blog post, Council of Economic Advisors Chairman Jason Furman pointed to a series of measurements showing that healthcare prices and premiums are increasing at historically low rates. He said the trend is partly due to the Affordable Care Act, which contains measures intended to restrain the growth of healthcare costs.

{mosads}”2014 is shaping up to be a year of continued success in keeping underlying growth in healthcare costs low, alongside historic progress in expanding health insurance coverage to millions more Americans,” he wrote.

The White House officials cited both public and private data to argue that cost growth is happening more slowly.

The price of healthcare goods and services rose just 0.9 percent in the last year, the slowest rate of increase in the last 50 years, according to the federal Bureau of Economic Analysis.

Meanwhile, Automatic Data Processing (ADP), a human resources firm, reported that premiums for large-employer health plans grew 1.7 percent from 2013 to 2014, compared to 3.1 percent in the previous year.

Economists generally attribute slower healthcare cost growth to the dragging economy, though some argue ObamaCare is playing a role.

The analysis comes as White House officials await news about next year’s premium prices on ObamaCare’s exchanges.

While premiums on the marketplaces are expected to increase, as they do every year in the private insurance market, it is unclear whether the dramatic hikes predicted by some industry officials will materialize.

State insurance commissioners are expected to release rates over the next six months, with at least eight preparing to announce them in the month of June.

In states where Democrats are defending Senate seats, the size of the rate increases will go a long way in determining ObamaCare’s potency as a political weapon.

In the blog post, Furman sought to rebut claims that healthcare prices have risen more quickly under the healthcare law. He also said that an overall increase in medical spending is not driving higher consumer costs.

“Even as coverage expands, the underlying slow growth in healthcare prices, per-enrollee spending and premiums that we have seen in recent years is continuing,” Furman wrote.

The post was co-authored by Matt Fiedler, a senior economist with the Council of Economic Advisors.