... a funny thing has happened: Health spending has slowed sharply, and it’s already well below projections made just a few years ago. The falloff has been especially pronounced in Medicare, which is spending $1,000 less per beneficiary than the Congressional Budget Office projected just four years ago.That is one key paragraph from this Paul Krugman column in Monday's New York Times. As is often the case, his column is chock full of facts, most of which demonstrate how wrong the naysayers have been.
Continue with me as I explore a few parts of this important column.
Krugman says there are three key things to note.
First, the supposed fiscal crisis due to the explosion of Medicare costs
has been postponed, perhaps indefinitely. . . .We’ll probably have to raise more revenue eventually, but the long-term fiscal gap now looks much more manageable than the deficit scolds would have you believe.Second, because Medicare is a government program, the savings are NOT due to a slowdown in the economy, but in fact are real.
The third big implication of the Medicare cost miracle is that everything the usual suspects have been saying about fiscal responsibility is wrong.Krugman parses the arguments made by those who have criticized Medicare as unsustainable, or argued for private insurance, for example, claiming that Medicare Part D's costs are less than projected because of the private sector involvement, whereas Krugman points at the real reasons:
Medicare Part D is costing less than expected partly because enrollment has been low and partly because an absence of new blockbuster drugs has led to an overall slowdown in pharmaceutical spending.He also dispense with the suppose sticker shock, pointing out that increases in premiums for "Obamacare" are now project to be minimal in most costs, and in a few states (CT and AR) are actually projected to fall.
All this leads to his conclusion:
What’s the moral here? For years, pundits and politicians have insisted that guaranteed health care is an impossible dream, even though every other advanced country has it. Covering the uninsured was supposed to be unaffordable; Medicare as we know it was supposed to be unsustainable. But it turns out that incremental steps to improve incentives and reduce costs can achieve a lot, and covering the uninsured isn’t hard at all.Beyond the Obama tag-line at the end, the data points at one key point he does not directly address - how much could the savings have been had we truly pursued single-payer, whether in the form of Medicare for all or some other version thereof?
When it comes to ensuring that Americans have access to health care, the message of the data is simple: Yes, we can.
I now teach AP Economics. One key lesson of economics is that it involves choices. Another is that the models we use need to be adjusted to match the real-world data, a point that is very much in play for example in the recent work of Thomas Piketty on capitalism, where he examines and analyzes massive amounts of data.
Krugman has looked at the data on health care.
The sky is not falling.
Except upon the chicken littles of the Right who hoped to use the failure of "Obamacare" to take full control of the reins of government.