An attribution problem associated with Obamacare

Is the federal health care law helping to drive down health care costs in the United States? Despite supporters’ claims that Obamacare has had that positive effect, Alex Adrianson at the Heritage Foundation’s “Insider Online” blog offers an alternative view.

The Obama administration wants people to believe that recent slower growth in health care costs is an accomplishment of ObamaCare. But the slowing of health care costs is part of a decade-long trend. As you can see from the chart below, produced by Investor’s Business Daily, the trend even preceded the economic slowdown that started in 2008-2009.

One likely reason for the slowdown, as IBD’s editors note, is that businesses have been shifting to consumer-directed plans that give workers incentives to be smarter health care shoppers:

Health savings accounts, for example, have exploded in popularity. These plans combine higher deductibles with lower premiums and tax-free savings accounts for out-of-pocket costs. HSAs now account for more than 20% of the employer market, up from zero in 2005.

A RAND study concluded that expanding the HSA market share to 50% would cut health costs by nearly $60 billion a year.

Wal-Mart offers its employees individual coverage for about $40 a month. And that’s for a plan with a deductible of $2,750, access to a wide network of doctors and hospitals, and at least $250 deposited in a worker’s own health reimbursement account, according to the Washington Examiner.

But rather than learn from the Wal-Marts of the world about what’s working and what isn’t, President Obama decided that Washington politicians and federal bureaucrats know better. And as a result, ObamaCare will severely undercut these positive trends.

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