More moderately good news on the long-term budget front today, with the new Medicare Board of Trustees report showing that between slowing cost increases and Affordable Care Act cuts, Medicare is in slightly better shape this year than last year.
That doesn’t mean that Medicare is out of the danger zone over the long run, even if the improvements are sustained — and as Kevin Drum notes, these year-to-year fluctuations in long-term projections can be illusions. The news just means that the program is in slightly less bad shape over time. Remember, the projected long-term budget deficit, the one that really does scare honest deficit hawks, is almost entirely driven by health care costs.
Remember too, however, that health care economists tell us that it’s not so much of a budget deficit problem as an overall economic problem. In other words, spiraling health care inflation is just as unsustainable whether it’s absorbed by government or by the private sector.
I think there are really three takeaways from this news. One is that whatever else is the case about Obamacare, it certainly doesn’t appear to be making health care inflation worse, at least so far. There is evidence that it’s actually helping drive improvements; it’s going to be a while before we know whether that’s correct or not, but at least predictions of disaster don’t seem to be coming true at this point.
The second is that one of the Republican concerns — that projected Medicare savings in the ACA were unlikely to materialize because people who were hurt by the cuts would pressure for their repeal — also doesn’t seem to be happening so far. The only pressures for repeal, in fact, are the same old partisan ones, not interest group pleadings which might get traction outside of the conservative information loop. Again, that might change as implementation continues, but not yet.
And the third is that whatever happens once Obamacare comes fully on line, so far at least we’re hearing more good news than bad. Jonathan Cohn today, in fact, has an item up now about another gloom-and-doom prediction, this one about the exchanges, that at least so far seems to be not coming true.
There’s a bit of a sense out there that ACA implementation is going badly, perhaps driven by asymmetric reactions: Supporters are afraid of acting triumphant and then being undercut when inevitable problems arise, even if they are small, while opponents are motivated to mainly talk about those problems. However, increasingly there’s a case to be made that implementation is actually proceeding fairly smoothly. There’s still a long time to go, but there’s nothing wrong, for now, in embracing every bit of good news.