Charles Roehrig, a vice president at the institute, wrote in an e-mail that Furman’s work may show that states that have expanded insurance coverage the most, whether by Medicaid or private insurance, “have had somewhat faster job growth.”
“This is probably a sound conclusion,” he said.
Hard to Parse
Economists have had difficulty parsing out how much of the slowdown in health-care spending is related to the recession that ended in 2009 and how much results from other elements, including the Affordable Care Act. The reasons for the reduced pace “may not ever be fully understood,” Furman acknowledged.
Nonetheless, he attributes about half a percentage point of the annual decrease to the health law, mainly due to cuts in payments for hospitals and other services through Medicare, the program for the elderly and disabled.
Altarum’s Roehrig said Medicare payment policies “can claim some credit” for slowing costs in that program but that 60 percent of the broader reduction in health-care spending is connected to the economy.
“Much of the rest,” he said, is “explained by some temporary factors not linked to the recession.”
Douglas Holtz-Eakin, a conservative economist who heads the American Action Forum, an advocacy group that opposes the Affordable Care Act, poked holes in Furman’s argument.
U.S. worker productivity isn’t increasing, which would be expected if people are healthier under the Affordable Care Act, he said. The argument that expanded coverage and insurance subsidies increased demand for services “ignores where our money comes from,” because those benefits are paid for in part by higher taxes, which reduce economic demand, Holtz-Eakin said.
(A footnote in Furman’s prepared remarks tacitly acknowledges this, saying that “the effects of the law as a whole could be somewhat smaller.”)
‘Just Desperate’
“There’s nothing about a trillion dollars of new spending, $500 billion in new taxes and $50 billion in regulatory costs that is pro-growth,” Holtz-Eakin said. “To claim otherwise is just desperate.”
One area where Furman and Holtz-Eakin are in agreement: the causes of the slowdown in health-care costs aren’t well understood.
“We don’t know” if the Affordable Care Act helped, Holtz- Eakin said. “The honest truth.”