O’Care’s Rising Cost

Early this past April Obama bragged from the White House Rose Garden that Obamacare was reducing the growth in health-care costs. Here Michael Tanner of the Cato Institute points out that, in fact, health-care expenditures last quarter have grown 9.9% on a year-over-year basis. Some of the growth can be attributed to the economic recovery, but much of the rise comes from the increased use caused by O’Care itself. As Mr. Tanner writes, “If you give more stuff to more people, you can expect it to cost more.”

It was not so long ago that the administration was bragging that Obamacare was reducing the growth in health-care costs even before it was fully implemented. However, health-care expenditures grew 9.9 percent on a year-over-year basis last quarter, the biggest increase since 1980. Some of the rise is probably attributable to the economic recovery, just as some of the prior slowdown was due to the recession. But most observers also attribute much of the rise to increased utilization caused by Obamacare itself. This really shouldn’t be much of a surprise. If you give more stuff to more people, you can expect it to cost more.

Even the Obamacare website is still not fully working. The system’s “back end” is a tangle of technical workarounds moving billions of taxpayer dollars and consumer-paid premiums between the government and insurers. Some crucial components remain under construction, including those essential for accurately paying insurers. Experts say the longer these components take to fix, the likelier it is that there will be accounting problems that could leave taxpayers on the hook for higher premium subsidies or health-care costs.

Perhaps this is why, despite the Obamacare supporters’ claims of victory, the public remains decidedly unconvinced. According to the most recent poll from the Pew Research Center, 55 percent of voters disapprove of Obamacare, while just 41 percent approve. That’s a bigger margin of disapproval than when the law was first passed back in 2010.

After being told that he had won the battle of Asculum in 279 b.c., the Epiriot king Pyrrhus was reported to have looked over his massive casualties and replied, “Another such victory and I am undone.”

Heading into this fall’s midterm elections, that is a thought Democrats should keep in mind.

Debbie Young

Debbie, editor-in-chief of Richardcyoung.com, has been associate editor of Dick Young’s investment strategy reports for over three decades. When not in Key West, Debbie spends her free time researching and writing in and about Paris and Burgundy, France, cooking on her AGA Cooker, and practicing yoga.