Monday, September 1, 2014

Krugman on the 'Medicare miracle'

Posted By on Mon, Sep 1, 2014 at 6:48 AM

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Paul Krugman writes in the New York Times
about good news on the health insurance and federal budget front.

Medicare spending has slowed dramatically (see chart). Reduced Medicare spending means the federal deficit "crisis" is no longer a crisis. Cost-control measures in the Affordable Care Act have had a positive impact. Insurance rates are dropping, not rising, in the market falling under Obamacare structures. (What? You hate Obamacare like Tom Cotton? What's not to like?)

Here's a cautionary note for the Republican health care reformers in Arkansas. 

One involves the supposed savings from running Medicare through for-profit insurance companies. That’s the way the drug benefit works, and conservatives love to point out that this benefit has ended up costing much less than projected, which they claim proves that privatization is the way to go. But the budget office has a new report on this issue, and it finds that privatization had nothing to do with it. Instead, 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.

The windfall profits for insurance companies from all the new government-subsidized customers doesn't come free.

But, generally, Krugman sees good news. The Pony Express and smoke signals will eventually penetrate even darkest Arkansas with this news, if not in time for Nov. 4.

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.

When it comes to ensuring that Americans have access to health care, the message of the data is simple: Yes, we can.

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