Stand up for the facts!

Our only agenda is to publish the truth so you can be an informed participant in democracy.
We need your help.

More Info

I would like to contribute

By Sean Gorman October 4, 2013

Moran says Obamacare has "reined in" the growth in health care costs

U.S. Rep. Jim Moran says Obamacare is stunting the growth in health care costs.

"Rising health care costs have handicapped consumers and choked family budgets," Moran, D-8th, said in a Sept. 12 statement. "Thankfully, that growth has been reined in through the Affordable Care Act."

We asked for proof and Moran’s office pointed to a 2012 report from the Centers for Medicare and Medicaid Services. It said total U.S. health care spending in 2011 was $2.7 trillion. That was a 3.9 percent increase over 2010.

The study said the growth rate was low by historical standards, as were the 2009 and 2010 growth rates of 3.8 and 3.9 percent respectively. The Kaiser Family Foundation wrote in April that health care spending is growing at the slowest rate since the government began keeping official tallies in 1960.

Obamacare was signed into law in 2010, so the low growth rates somewhat match up with the creation of the law. But they also coincide with the nation’s slow recovery from the Great Recession, and many economists see this as the real reason for slowed growth in health care spending.

The 2012 CMS report cited by Moran’s office doesn’t credit Obamacare for the slowed spending. It said the lagging growth rate "largely reflects the lingering effects of the recent recession and modest recovery." CMS said the downturn led to lower health spending as employers cut costs and the number of people with private insurance dropped.

In a companion piece in Health Affairs, a policy journal, CMS officials said Obamacare had "no discernible impact" on overall health care spending in 2011.

Shortly after Moran made his statement, CMS released its 2013 report on health care expenditures. It’s charts showed that, with or without Obamacare, costs would have increased by an average of about 3.9 percent a year in 2010 and 2011 -- the latest years for which conclusive research is available.

Moran’s office also pointed to a pair of May reports by two separate teams of Harvard University researchers that examined the reasons beyond the economy to explain the slow cost growth in recent years.

One paper said that various factors -- such as insurers shifting costs of benefits to people in employer-sponsored insurance -- drove the slowdown. The second paper found the recession accounted for only 37 percent of the slowdown while another 55 percent is "unexplained."

David Cutler, a co-author of the second report who advised Obama’s 2008 campaign, told our colleagues at PolitiFact National that Obamacare is "one likely explanation" for the slowing cost growth.

The Kaiser Family Foundation, in its April report, said the lackluster economy accounted for 77 percent reason the increase in health care spending has slowed. It attributed the other 23 percent to structural changes within the health care system, such as rising levels of patient cost sharing that discourage use of services.

A co-author of the report, Larry Levitt, told ABC News he thinks Obamacare "is responsible, indirectly, for a good bit of what the economy doesn’t explain." But, Levitt added, "the precise impacts can’t be proven."

Drew Altman, the CEO of the Kaiser Family Foundation, also said in an op-ed in Politico that the specter of reforms from the law means "it is entirely likely that Obamacare has played and will continue to play a role in the slowdown in health-care cost growth and accelerating market change."

A May 2013 report from the Urban Institute, notes the slowdown in health care spending began in 2002, pre-dating the recession and Obamacare. The cause, the Institute said, could be related to a long-time slide in real incomes.

Alwyn Cassil, a spokesman for the Center for Studying Health System Change, said Moran’s statement is "overly simplistic" and an "overly optimistic" view of Obamacare’s impact. Many of the law’s provisions haven’t even gone into effect yet, she said.

In 2014, CMS is projecting health care costs will rise by 6.1 percent. The agency said the increased rate will be driven in part by expanded health insurance coverage under Obamacare. About 11 million people are estimated to gain insurance next year as the mandates on Medicaid expansions kick in and people start buying plans on state-based health exchanges. Over time, about 30 million uninsured people are expected to get coverage.

The law requires efficiencies in the delivery of health care that supporters of Obamacare say will stunt the long-term growth in costs. But as we’ve noted before, it’s an open question whether those measures will be sustainable.

Our ruling

Moran said health care costs have been "reined in through the Affordable Care Act." Other Democrats have made similar statements.

The rate of cost growth began to slow in 2009 -- the year before Obamacare was passed, when the nation was in recession. Many analysts say the slow economic recovery is the major reason health care spending have been rising at historically low rates. Research by the Centers for Medicare and Medicaid Services says that Obamacare has played "no discernable role" in the slowed growth rate.

That doesn’t mean Obamacare has played no role. Some analysts, including the CEO of the Kaiser Family Foundation, believe Obamacare has helped slow costs, but say they can’t quantify its impact.

All told, Moran’s statement is highly exaggerated and we rate it Mostly False.

Our Sources

Rep. Jim Moran, "Moran statement on $1.2 billion in premium savings from Obamacare," Sept. 12, 2013.

E-mails from Thomas Scanlon, spokesman for Rep. Jim Moran, Sept. 19 and 25, 2013.

Centers for Medicare and Medicaid Services, "National health expenditure projections 2011-2021," January 2012.

Centers for Medicare and Medicaid Services, "National health expenditure projections 2012-2022," September 2013.

Health Affairs, "The slowdown in health care spending in 2009-11 reflected favors other than the weak economy and thus may persist," May 2013.

Health Affairs, National health expenditure projections 2012-2022, September 2013.

Health Affairs, "If slow rate of health care spending growth persists, projections may be off by $770 billion," May 2013.

Health Affairs, "National health spending in 2011: Overall growth remains low, but some payers and services show signs of acceleration," January 2013.

The Washington Post, "The cost curve is bending. Does Obamacare deserve credit?" May 31, 2013.

The Kaiser Family Foundation, "Assessing the effects of the economy on the recent slowdown in health spending," April 22, 2013.

The Kaiser Family Foundation, "Study finds recent slowdown in health spending growth mostly tied to economy," April 22, 2013.

The Urban Institute, "What drove the recent slowdown in health spending growth and can it continue?" May 2013.

American Medical News, "Health spending slowdown shows signs it will stick," May 20, 2013.

PolitiFact, "Nancy Pelosi says Obamacare is bringing down the cost of health care is bringing down health care costs," May 13, 2013.

PolitiFact, "Obama said health premiums in last two years went up slower than any time in the past five decades," Oct. 4, 2012.

PolitiFact Virginia, "Morgan Griffith says GAO estimates Obamacare will add $6.2 trillion to long-term deficits," June 17, 2013.

ABC News "Fact Check: Is Obamacare slowing the growth of health care costs?" Sept. 19, 2013.

Drew Altman and Larry Levitt op-ed in The Washington Post, "We still have a health care spending problem," April 21, 2013.

Interview with Alwyn Cassil, spokeswoman for the Center for Studying Health System Change, Sept. 24, 2013.

The Washington Post, "Taming the health-care monster?" Jan. 8, 2013.

PolitiFact Virginia, "Morgan Griffith says GAO estimates Obamacare will add $6.2 trillion to long-term deficits," June 17, 2013.

Forbes "Obamacare will increase health spending by $7,450 for a typical family of four," Sept. 23, 2013., "FactChecking Pernicious Obamacare claims," Sept. 25, 2013.

Drew Altman, CEO of the Kaiser Family Foundation, op-ed in Politico, Sept. 25, 2013.

The Urban Institute, "Despite criticism, the Affordable Care Act does much to contain health care costs," October 2012.

Browse the Truth-O-Meter

More by Sean Gorman

Moran says Obamacare has "reined in" the growth in health care costs

Support independent fact-checking.
Become a member!

In a world of wild talk and fake news, help us stand up for the facts.

Sign me up