Obama Economists’ Bad Obamacare Economics

President Obama’s Council of Economic Advisers (CEA) has issued its valedictory report on the state of Obamacare. The gist of its argument is that Obamacare is doing fine, on the verge of overcoming its growing pains since 2014. Critics (like me) who suspect the 25 percent increase in premiums for 2017 are a problem are off-base, according to the CEA. In a normal insurance market, such an increase would indicate a “death spiral”: The sick enroll and the healthy stay away, causing next year’s premiums to increase. The cycle repeats itself until only the sickest enroll. The CEA asserts this...

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Congress Just Punched a Big Hole in Obamacare

President Obama signed the 21st Century Cures Act on December 13. Promoted as a pro-innovation bill, the new law will improve the Food and Drug Administration’s regulatory processes; as well as fund Vice-President Biden’s Cancer Moonshot, the National Institutes of Health, and steps to reduce the opioid epidemic. However, the final version of the bill also included an important payment reform: Significantly expanding the use of Health Reimbursement Arrangements (HRAs) by small businesses. The Affordable Care Act limited employers’ use of these funding vehicles. The IRS promulgated rules...

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