Obamacare’s Amazing Wayback Clause - The American Spectator | USA News and Politics
Obamacare’s Amazing Wayback Clause

Obamacare’s boosters have made so many implausible assertions about its supposed successes that it’s difficult to single out one as the most preposterous. But any list of their most comical claims would have to include those involving the law’s “wayback clause.” Haven’t heard of that one? Well, like the provision authorizing the IRS to issue subsidies via federal exchanges, it’s absent from PPACA’s text. Nonetheless, its efficacy is routinely touted by Obamacare’s proponents as proof that “reform” works.

The most celebrated effect of this amazing provision is its retroactive reduction of medical inflation during the years preceding the law’s implementation. Obamacare was passed in 2010. However, except for a few minor provisions, it didn’t go into effect until 2014. Yet the law’s wayback clause is such a powerful cost control tool that it has been able to traverse the time-space continuum and slow the rate of health care inflation, as the President himself has phrased it, “every single year since the law passed.”

The wondrous workings of the wayback clause have also been heralded by congressional Democrats. Wisconsin Rep. Gwen Moore, for example, told a radio interviewer the following: “We’ve had the lowest health care inflation in history because of Obamacare.” And the President’s advisors have, of course, chimed in. The Chairman of the White House Council of Economic Advisors took to the pages of the Wall Street Journal to credit the “largely unheralded slowdown in health spending” to Obamacare.

It goes without saying that such marvels have been the subject of many “news” articles and countless opinion pieces. A typical example of the latter is this column in the New York Daily News by Bill Hammond, who parrots the party line and issues the following snide challenge: “So who will be the first major Republican to admit that Obamacare is working? Who among the GOP’s brain trust is intellectually honest enough, or brave enough, to follow the developing facts instead of talking points and opinion polls?”

But if Hammond wants anyone to admit that Obamacare is working based on the decline of health care inflation, he will have to explain why that trend began eight years before the law was passed. As the New York Times reports, “The slowdown in spending growth began in 2002.” Does Hammond actually believe Obamacare’s wayback clause was able to transcend the laws of physics as well as economics, that it was able to reach all the way back to the Bush era and halt what he calls the “ruinous spiral of spending”?

Hammond would be loath to say so, of course, but it is possible to be honestly skeptical about the claims he and others make concerning the law’s successes, particularly in the area of costs. Nonpartisan studies attribute the decline in health care inflation to economic factors, insisting that the recession was the most important factor in reducing growth in medical spending: “This suggests that the recent decline is not primarily the result of structural changes in the health sector or of components of the Affordable Care Act.”

Some have even suggested that considerable credit for the slowdown in health care inflation—you Obamacare advocates should sit down before reading further—must go to the policies of George W. Bush. Much of the decline has been driven, these researchers point out, by a “remarkable” slowdown in Medicare spending, particularly in the Part D prescription drug program. Specifically, they write, “Our analysis shows that Part D has accounted for over 60 percent of the slowdown in Medicare benefits since 2011.”

For those naïve enough to claim that this is a benefit of Obamacare’s closure of the much maligned “donut hole,” the reality is that this puts upward pressure on medical spending. Which brings us to the kind of inflationary pressures that our health care system will face because of PPACA. Beginning in 2014, the law increased demand on our health care system while doing nothing to increase the supply of medical services. This is by definition inflationary. And there are already signs that this is having the predictable effect.

Bloomberg reports that federal data suggest the party is already over: “The nation’s nearly $3 trillion medical bill grew 5 percent last year, compared with an average annual rate of 3.9 percent from 2009 to 2013.” And it gets worse. It appears that the 2014 acceleration in medical inflation might just be the beginning: “The data confirm earlier estimates by Altarum economists, which might be a sign that costs will accelerate in 2015.” In other words, Obamacare has probably ended the 12-year downward trend in health care inflation.

And yet, as recently as last week, the President made a speech in Cleveland in which he included a none-too-subtle suggestion that Obamacare was responsible for keeping “health care inflation at the lowest rate in nearly 50 years.” This will no doubt go down with his countless other false claims as an all-too-characteristic lie. Obamacare has made U.S. health care more expensive, less accessible, and it will eventually reduce its quality. No amount of presidential prevarication will alter that. Not even the wayback clause can change it.

David Catron
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David Catron is a recovering health care consultant and frequent contributor to The American Spectator. You can follow him on Twitter at @Catronicus.
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