Will Obamacare Boost Economic Growth?

There's a lot of speculation about how the Affordable Care Act is likely to play out in coming months and years. But lately few voices are pushing the point that Obamacare is likely to spur the economy -- both in the near and long term.

I say lately because Obama officials once often argued that controlling healthcare costs through reform was essential to making the U.S. more competitive in a global economy where our top rivals all spend a much lower share of GDP on healthcare. Somehow, that rationale lost salience over time -- while the endless conservative drumbeat about how Obamacare was a "jobs killer" never lost steam.

It will be a while before the law's impact on healthcare costs is known for sure, even as some initial evidence suggests it's having this effect already. What's more intriguing to talk about now is whether the law will have short-term stimulus effects as it lowers coverage costs for some consumers. I got focused on that possibility thanks to a Facebook post from one of my friends. She wrote:

Holy crap shut up Fox news. I just happen to have you on in the background and you have not stopped complaining about Obamacare for literally hours.

Meanwhile, as you describe this frightening nightmare that is going to ruin our country, I logged on to Healthcare.gov and changed my health insurance cost from ONE THOUSAND dollars a month, to 450. Same plan, same company - Blue Cross. Website worked fine. I save 550 bucks a month for the same insurance - 6600 dollars a year. Blue Cross has been gouging me for years because I am a sole proprietor, Small business.

So here's a person who, thanks to Obamacare, suddenly has another $550 a month in their pocket -- much of which, presumably, she'll end up spending.

Of course, what we've mainly heard about in the media is how Americans are seeing existing policies canceled and facing much higher premiums for new policies. But suppose that's a short term blip, as Administration officials claim, and my friend's experience turns out to be more typical -- falling insurance premiums thanks to greater competition and transparency in the healthcare marketplace, as well as an influx of young people into insurance pools. That could mean a nice bump for consumer spending in the next couple of years.

All of which leads to a larger point about healthcare spending and the economy. Needless medical spending doesn't just benefit anyone; it specifically tends to benefit doctors, hospitals, insurers, and makers of medical technology. In other words, such spending tends to be part of the upward siphoning of income from ordinary Americans to already affluent individuals and corporations.

If we can slow, or stop, that giant sucking it won't just mean more money in the pockets of the middle class. It will also mean less inequality.