Cost control and the ACA
One of the odder claims Republicans levy at the Affordable Care Act is that, yes, it does pay for itself and reduce the deficit, but we could've reduced the deficit even more if we had taken all of the policies the bill uses to pay for itself and passed them as part of a deficit reduction package. One answer to that, of course, is that then we wouldn't be covering the uninsured, but that's not a very persuasive argument to people who don't care about covering the uninsured. Another answer, as Jonathan Chait notes, is that there was no chance that would happen:
It's highly unrealistic to presume that the cost savings used to finance the Affordable Care Act would be sitting on the table if Obama hadn't scooped them up to cover the uninsured. Those savings were bargained for in exchange for covering the uninsured. Medical providers well be getting some thirty million new subsidized customers, so they're willing to make concessions elsewhere in exchange. Some of the cuts are literally not possible without covering the uninsured -- one of the largest cuts comes from reducing reimbursements to hospitals who treat the indigent, because there will now be fewer indigent patients.
In any case, there was no plausible path to extracting hundreds of billions of dollars in cuts from providers without offering an increase in coverage for the uninsured. If you want to cut Medicare, the most realistic option has always been means-testing. The Affordable Care Act has done nothing to foreclose this option.
I'd go further than Jon: It's not just that some of the cuts wouldn't have happened in the absence of the ACA. It's that the most important cost controls couldn't have happened in the absence of the ACA. The excise tax and the Independent Payment Advisory Board are, over the long run, much more important than any of the other cost controls in the bill. One taxes the value of health plans, falling particularly heavily on union plans and striking a serious (and, over time, larger and larger) blow against the employer-based health-care system. The other is a way to reduce congressional interference in efforts to cut costs in Medicare.
It's impossible to imagine liberals accepting either policy without the lure of universal health care. It's also impossible to imagine conservatives containing their glee over either policy outside the context of a universal health-care plan that they don't want to let themselves praise.
July 19, 2010; 11:43 AM ET
Categories: Health Reform
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