Analyst Says ACA Will Not Explode Health Care Costs

A leading health care economist says that contrary to claims by conservative groups, health care costs will not skyrocket because of the Affordable Care Act.

Last July, Gov. Scott Walker wrote an editorial in the Washington Post claiming that the Affordable Care Act, also known as Obamacare, would cause 59 percent of people who buy their own health insurance to see their insurance premiums increase by 31 percent. That was based on a report written in 2011 by Dr. Jonathan Gruber, director of health programs at the National Bureau of Economic Research. (Gruber has worked with both Republicans and Democrats on health care reform.)

During a conference call with reporters organized by Citizen Action Wisconsin, though, Gruber said sounding the alarm about premium increases isn’t telling the whole story. He says that’s because 57 percent of the people using health insurance exchanges will qualify for tax credits: “You have to look at the post-tax-credit price. By my estimate the post-tax-credit price falls by about five or six percent.”

Gruber does say, however, total costs will go up for a small percentage of people who are young and healthy and have enjoyed artificially lower rates. “The losers are essentially the people who have benefited from existing discrimination in this market. Wisconsin has a highly discriminatory non-group market where young, healthy people can get excellent rates and older, sicker people are excluded and have to go to the high-risk pool where they pay expensive rates that are subsidized by the state.”

Overall, Gruber says, costs will go down for most people, and more of them will get health care.

Walker and Republican state Rep. Sean Duffy are among opponents of the health care law who argue that costs will skyrocket, millions will lose their employer-provided insurance and that it will cause more people to be dependent on government.