Wednesday, September 18, 2013

Obamacare: Don't Believe What You Read (first in a series?)

The liberal MSM would have the sheeple believe that Obamacare is, or will be, producing miraculous cost savings in health care. See a million slippery, suggestive blog posts like this or this.

Now, it's true that health care costs have been rising more slowly than normal as of late. But it's not clear how Obamacare could possibly be the cause. Obamacare contains no serious cost control mechanism. And there's a simple reason why it doesn't.

As Our President said countless times, the Obama-Heritage plan is rooted in the eternal verities of choice and competition. Yet choice and competition are precisely why US health inflation is so high in the first place. Every other country uses some form of price control to control costs. The uniquely American solution of the "Demo-plan" was concocted specifically to avoid that scenario.

Why? Because, as a senior Democrat involved in drafting the law explained: “There was no way we had the votes in either the House or the Senate if PhRMA was opposed — period.” And the same went for the hospitals, the insurers, and so on.

The meta-theory behind Obamacare was that since a good law didn't have the votes, it was more realistic to pass a bad law and pretend it was good. Now we are engaged in a great experiment, testing whether that law, or any law so conceived, can long endure; we are met on a great battlefield of that experiment.

So anyway, it turns out that Obamacare did not control U.S. health care costs. As the chart below demonstrates, it did way better than that: it controlled health care costs in the U.S. and the rest of the world at the same time. And it started working before the law was even passed. (This is what is known as a wonkblague.)

The remainder of this post consists of a graph. Please click on the graph for full enjoyment:

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