Ex-Adviser to White House: Don't Overrate Lower Healthcare Costs

Tuesday, 07 Jan 2014 09:28 PM

By Greg Richter

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A new report that spending on healthcare in the United States has slowed for the past four years has the White House touting the Affordable Care Act as the cause, but President Barack Obama's former economic adviser says not so fast.

Appearing Tuesday on Fox News Channel's "Your World with Neil Cavuto," Austan Goolsbee said Obamacare may be at least partly behind lower costs in healthcare, but not by any more than 50 percent, if that.

Goolsbee said 25 percent to 30 percent of the credit can be attributed to the economy's slowing down and 25 percent to 30 percent to one-time factors, such as popular drugs' going off patent.

But Goolsbee said the fact that the price-increase slowdowns are happening in Medicare, which is much less affected by the economy, means they are not primarily caused by the economy.

Cavuto said lower costs are always welcome, but he suspects Obamacare supporters are simply seizing on the news to convince the country that the increasingly unpopular and troubled healthcare law is worth the cost.

Goolsbee agreed that "nobody should get too hyped up about any one-year or two-year effect, when you know stuff can change." He noted that at the end of the 1990s, when the government began taking in much more tax revenue than expected, people started projecting multitrillion-dollar surpluses.

Those predictions didn't pan out.

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