Thursday, August 31, 2017

Smucker (PA16) Misleads Constituents on Health Care

Representative Smucker (PA16) recently sent out an email to his constituents soliciting a response to this question: "Since Obamacare was enacted in 2010, has the cost of your health care increased, decreased, or stayed the same?"

As an economist and one who teaches health economics, I'm speechless. What household expenditure hasn't increased in cost in the last 7 years? This poll question either suggests the Congressman might need a basic lesson in economics or is purposefully misleading and politically baiting his constituents.

National Healthcare Expenditures (NHE at www.cms.gov) have risen faster than general inflation every year since they've been measured. This is due to a number of factors, some beyond government's control: demographics, technology, inelastic demand, monopoly power, lifestyle choices, just to name a few. A realistic goal for the nation is not an overall decrease in health care expenditures but to reduce the growth rate to something reasonable and manageable. It's your health after all.

From 1975-2010, NHE increased 9.2% annually, with a downward trend from double digit growth prior to the early 1990s. From 2010-2015, NHE have increased on average 4.9% annually. CMS.gov projects annual growth of 5.6% until 2025 based on current policy, an annual rate below the historical average due in part to a healthier population resulting from the ACA's required essential benefits.

If Republicans can come up with a new plan to decrease annual health expenditure growth rates more than the ACA without pricing people out of health care and/or reducing coverage, I think we are all ears.
Blue = NHE
Orange = Inflation (CPI)