In another of those in depth analyses that the New York Times loves to print, we were told today that savings on healthcare may be contributing to slower economic growth. The point of the piece by Binyamin Appelbaum is that Obamacare has helped to slow spending on healthcare and this spending reduction has cut the growth rate of the American economy. Unfortunately, the article is completely wrong.
First of all, Appelbaum tells us that healthcare spending grew more slowly than the economy in 2011 and 2012 and that the savings were used to pay down debt rather than spending or investing. One big point here is that, according to Appelbaum, Obamacare is responsible for this slow down in healthcare spending. Of course, the trouble with that conclusion is that Obamacare did not actually go into effect (with certain very minor exceptions) until January 1, 2014. It is hard to see how a slow down in health care spending in 2011 was the result of a law that had not yet gone into effect.
Second, Appelbaum missed the main reason that healthcare spending has declined. It has nothing to do with Obamacare, although it has much to do with president Obama. The policies followed by Obama and his administration have resulted in the decline of the median income of the American family. This is the first time that incomes have declined over a five year period since the Great Depression of the 1930's. People are spending less on healthcare for the simple reason that they cannot afford to spend more. Healthcare spending is not like purchases of luxury automobiles; it is an expenditure that comes from all segments of society, not just the wealthy. When the middle segment of America is squeezed by having its income decline by nearly 10%, one of the places that gets cut is spending on healthcare. Sure, there are areas that get cut before visiting the doctor, but healthcare spending is far from the last thing to get cut. Someone should tell Appelbaum and the Times that the Obama economy and its lasting damage to the middle and lower income levels are the main reason for declining healthcare spending. People are not healthier; doctors are not more efficient; it is just that most people are poorer and can no longer afford the same level of care.
I know that I will get email telling me that wider health insurance will stop this trend. Please don't waste your time with that nonsense. Anyone who obtains health insurance under Obamacare is going to have a huge deductible to pay on top of the monthly premiums. That deductible is just as much an obstacle to spending on healthcare as the lack of insurance itself. Remember, the decline in healthcare spending is small. It is not the result of people with health emergencies no longer getting treatment. No one is likely to choose to die rather than spending the cost to treat a heart attack or cancer. The spending that is being eliminated are the visits to the doctor for much more minor illnesses or for symptoms that are not recognized as being those of life threatening situations.
The truth is that healthcare spending has become a drag on the economy, but not in the way that the Times reports. Across America, millions upon millions of people are getting hit with major increases in their monthly health insurance premiums. Others are being forced into paying premiums for the first time. On top of this, literally billions of dollars is being channeled into paying for non-productive healthcare bureaucracies needed just to manage the Obamacare monstrosity and all its impacts. This combination is sucking tens of billions of dollars each month out of the economy. It is the equivalent of a major tax increase that prevents people from spending or investing. That is what is slowing the economy, not savings on healthcare.
First of all, Appelbaum tells us that healthcare spending grew more slowly than the economy in 2011 and 2012 and that the savings were used to pay down debt rather than spending or investing. One big point here is that, according to Appelbaum, Obamacare is responsible for this slow down in healthcare spending. Of course, the trouble with that conclusion is that Obamacare did not actually go into effect (with certain very minor exceptions) until January 1, 2014. It is hard to see how a slow down in health care spending in 2011 was the result of a law that had not yet gone into effect.
Second, Appelbaum missed the main reason that healthcare spending has declined. It has nothing to do with Obamacare, although it has much to do with president Obama. The policies followed by Obama and his administration have resulted in the decline of the median income of the American family. This is the first time that incomes have declined over a five year period since the Great Depression of the 1930's. People are spending less on healthcare for the simple reason that they cannot afford to spend more. Healthcare spending is not like purchases of luxury automobiles; it is an expenditure that comes from all segments of society, not just the wealthy. When the middle segment of America is squeezed by having its income decline by nearly 10%, one of the places that gets cut is spending on healthcare. Sure, there are areas that get cut before visiting the doctor, but healthcare spending is far from the last thing to get cut. Someone should tell Appelbaum and the Times that the Obama economy and its lasting damage to the middle and lower income levels are the main reason for declining healthcare spending. People are not healthier; doctors are not more efficient; it is just that most people are poorer and can no longer afford the same level of care.
I know that I will get email telling me that wider health insurance will stop this trend. Please don't waste your time with that nonsense. Anyone who obtains health insurance under Obamacare is going to have a huge deductible to pay on top of the monthly premiums. That deductible is just as much an obstacle to spending on healthcare as the lack of insurance itself. Remember, the decline in healthcare spending is small. It is not the result of people with health emergencies no longer getting treatment. No one is likely to choose to die rather than spending the cost to treat a heart attack or cancer. The spending that is being eliminated are the visits to the doctor for much more minor illnesses or for symptoms that are not recognized as being those of life threatening situations.
The truth is that healthcare spending has become a drag on the economy, but not in the way that the Times reports. Across America, millions upon millions of people are getting hit with major increases in their monthly health insurance premiums. Others are being forced into paying premiums for the first time. On top of this, literally billions of dollars is being channeled into paying for non-productive healthcare bureaucracies needed just to manage the Obamacare monstrosity and all its impacts. This combination is sucking tens of billions of dollars each month out of the economy. It is the equivalent of a major tax increase that prevents people from spending or investing. That is what is slowing the economy, not savings on healthcare.
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