Obamacare Remains the Elephant in the Room for Healthcare Costs

In his 2013 State of the Union address, President Barack Obama proclaimed that “Already, the Affordable Care Act is helping to slow the growth of healthcare costs” in the United States. “And the reforms I’m proposing go even further. We’ll reduce taxpayer subsidies to prescription drug companies and ask more from the wealthiest seniors. We’ll bring down costs by changing the way our government pays for Medicare, because our medical bills shouldn’t be based on the number of tests ordered or days spent in the hospital; they should be based on the quality of care that our seniors receive.”

But whether the Affordable Care Act will bend the rising curve of health care spending is a matter that has been much debated in the years since the healthcare reform law was passed in March 2010 and much argued in the months since its key provision — the individual insurance exchanges — launched on October 1. For Republicans, evidence abounds that supports the party’s argument that Obamacare has not delivered on that key and oft-made promise.

Unfortunately for Republican critics, explaining why healthcare costs have risen sharply over the past several decades is exceeding complex, meaning that determining if the Affordable Care Act has slowed or fueled cost increases in any appreciable way requires a great deal of analysis, leaving room for politicians to argue a number of possible scenarios. Factoring into the equation are pharmaceutical pricing, the high administrative costs for medical payments, labor problems with medical professionals, and the high level of per capita income, among many other issues.