Health Care

Health Care


Brian Blase | Nov 19, 2015
A new study for the Mercatus Center at George Mason University examines the reasons behind the ACA exchanges’ failure to meet widespread expectations. The study explains the likely impact of this failure on health insurance prices and risk pool stability, bringing into question the law’s future prospects of survival without significant revisions.
James C. Capretta, Joseph Antos | Oct 27, 2015
Proponents of the Affordable Care Act (ACA) have frequently pointed to official cost estimates projecting that the law will reduce federal budget deficits. Much less attention has been paid to the primary reason for this favorable outlook: the law’s heavy reliance on indexing important provisions to restrain spending and increase revenue. These components of the ACA will automatically impose perpetual, across-the-board cuts on payments to certain institutional medical providers; increase premiums for lower-income households; and raise taxes on an ever-expanding segment of taxpayers.
Richard Williams, Robert Graboyes, Adam Thierer | Oct 21, 2015
A new paper for the Mercatus Center at George Mason University shows why the current system of medical device approval discourages technological innovation and ultimately affects patient choice. The approval process could be improved by introducing competition for approval—a process that already exists in the European Union.
Roger Feldman, Bryan Dowd, Robert Coulam | Oct 08, 2015
A new study published by the Mercatus Center at George Mason University assesses the numerous problems with Medicare’s price calculations and looks at how they affect prices in commercial insurance policies. The study proposes an arrangement of competitive bidding on bundles of services as a promising alternative to Medicare’s price-fixing regime.
David E. Bernstein | Sep 30, 2015
A new study published by the Mercatus Center at George Mason University describes how such an approach in Medicare Part B—which covers outpatient services such as office visits and preventive care—could enhance doctors’ participation in the program, expand choices for beneficiaries, boost innovation, and make prices more responsive to market forces. Below is a brief summary of this analysis. Please see “Restoring Freedom of Contract between Doctor and Patient in Medicare Part B” to read the entire study and to learn more about its author, David E. Bernstein, the George Mason University Foundation Professor at George Mason University School of Law.
Diana Thomas, Devon Gorry | Aug 17, 2015
A new study for the Mercatus Center at George Mason University finds that regulations intended to improve the quality of child care often focus on easily observable measures, such as group sizes or child–staff ratios, that do not necessarily affect the quality of care but do increase the cost of care. These regulations can have unintended consequences, including increasing the cost of child care while decreasing the wages of child care workers. Eliminating regulatory standards that do not affect the quality of care while focusing on those that do, such as teacher training, will improve the quality of child care while making it more affordable to low-income families.

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Nov 23, 2015

One of the most consequential provisions of the Affordable Care Act (ACA) is also one of its most obscure.The “productivity adjustment factor,” inserted by the ACA into the Medicare program, is a massive spending cut, one of the largest in the program’s history. It was included to make room in the federal budget for the ACA’s expensive new health insurance subsidies. If Congress follows past practice, the ACA’s higher spending will be with us long after savings from the productivity adjustment factor have been reduced or eliminated altogether.
Nov 19, 2015

In a new study published today by the Mercatus Center at George Mason University, I assess key predictions made by both government and nonprofit research organizations about the Affordable Care Act’s (ACA) impact. The misestimates include: overestimating total exchange enrollment, overestimating enrollment of higher income people who do not qualify for subsidies to reduce premiums, projecting too many healthy enrollees relative to less healthy enrollees, and underestimating premium increases.
Nov 19, 2015

In sum, double-digit premium increases in 2016 are a product of disappointing enrollment and insurers’ realization that a larger proportion of their enrollees are sicker and older than they expected. As premiums increase, deductibles are rising and provider networks are actually shrinking. These changes make ACA plans even less desirable to people who aren’t already sick or don’t qualify for large subsidies. The magnitude of the errors of initial predictions about the ACA’s effect is cause to re-examine our assumptions about health care markets. The failure of exchange plans to attract people who don’t receive giant subsidies should cause policymakers to revisit the law and allow people to purchase insurance products that they actually want.
Nov 06, 2015

The Affordable Care Act has generated an enormous amount of partisan rancor, but with more access to data, it is worth taking stock of how it has actually been working. We can safely say that the policy is costing less than anticipated, perhaps 20 percent less, according to a Congressional Budget Office estimate, and that it has reduced the number of Americans without insurance. But the numbers also suggest that by some measures, the Affordable Care Act has had only a limited impact on economic inequality.
Nov 04, 2015

ACA proponents, often pointing to Congressional Budget Office (CBO) estimates, argued that the law would reduce the number of uninsured people by about 30 million while producing federal budget savings. Five years later, low exchange enrollment suggests that far more people than projected will remain uninsured. New Mercatus research by James Capretta and Joe Antos shows that the projected federal budgetary savings result from provisions that are unlikely to be economically or politically sustainable.
Oct 26, 2015

In Part I, I showed that the administration’s new estimate of next year’s exchange enrollment is only about half of what prominent groups projected in 2010, and I discussed evidence that exchange plans are not attracting many young, healthy people. This piece shows that the groups also projected far too many unsubsidized enrollees and discusses reasons to be skeptical that the individual mandate will lead as many people to purchase coverage as assumed.


The ACA contains indexing provisions that are set to automatically reduce federal payments for health services or increase tax revenues every year into the future. CBO estimates show that the ACA will reduce future deficits by about 1.0 percent of GDP in the decade beyond the current 10-year budget window (roughly 2026–2035). This projection assumes uninterrupted implementation of the ACA’s aggressive indexing adjustments, but historical precedent tells us that these indexing measures will not be implemented as stated. The first chart below estimates, based on reasonable adjustments to the implementation of the indexing provisions, the presumed second decade deficit reduction of 1.0 percent of GDP will be eliminated and the ACA will start to increase the federal deficit.


Charles Blahous is the director of the Spending and Budget Initiative, a senior research fellow at the Mercatus Center at George Mason University and has served as a public trustee for Social Security and Medicare. He specializes in domestic economic policy and retirement security (with an emphasis on Social Security), as well as federal fiscal policy, entitlements, demographic change, and health-care reform.
Robert Graboyes is a senior research fellow and healthcare scholar with the Mercatus Center at George Mason University and is the author of the study “Fortress and Frontier in American Health Care.” He earned his PhD in economics from Columbia University. An award-winning teacher, Graboyes holds teaching positions at Virginia Commonwealth University and the University of Virginia.
Christopher J. Conover is an affiliated senior scholar at the Mercatus Center at George Mason University and a research scholar at the Center for Health Policy & Inequalities Research at Duke University.
Jerry Ellig is a senior research fellow at the Mercatus Center at George Mason University and a former assistant professor of economics at George Mason University. He specializes in the federal regulatory process, economic regulation, and telecommunications regulation.
Michael L. Marlow is an affiliated senior scholar at the Mercatus Center at George Mason University and professor of economics and distinguished scholar at California Polytechnic State University, San Luis Obispo.


Robert Graboyes | September 10, 2015
Dr. Robert Graboyes discusses the future of health care and how regulating historic models can impede innovative, game changing health solutions.

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Please join us for lunch with Mercatus Center Senior Research Fellow Jason Fichtner to discuss pro-growth policy options. He’ll also address the research and ideas Mercatus shares with policymakers in order to advance the debate on economic issues.


| Sep 29, 2015
In a new set of essays commissioned by the Mercatus Center at George Mason University, seven leading policy experts share innovative ideas on how to solve the pre-existing condition challenge. While their approaches exhibit differences as well as similarities, they are unified in their pursuit of a humane, equitable, fiscally sustainable solution to a conundrum that has driven and strained the entire post–World War II healthcare debate.

Media Clippings

Casey B. Mulligan | Oct 09, 2014
This excerpt originally appeared in The Washington Times.
Robert Graboyes | Sep 25, 2014
This excerpt originally appeared in Reuters.
Charles Blahous | Jun 04, 2014
This excerpt originally appeared in CQ and also appeared Roll Call.
Robert Graboyes | Jan 29, 2014
Robert Graboyes cited at Star-Telegram.
Tyler Cowen | Oct 30, 2013
Tyler Cowen cited at The Washington Post.
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