Skip to content Skip to navigation

Former White House budget chief talks health care at Stanford

Nov 16 2015

By May Wong

Despite the uphill battles fought to pass the Affordable Care Act and the potential for a new political party at the nation’s helm next year, the pillars and benefits behind the historic health care legislation are here to stay, a former White House budget director says.

“Ripping away a current benefit is really hard,” said Peter Orszag, who ran the Office of Management and Budget earlier in the Obama administration.

While some Republicans want to dismantle the 5-year-old health law, a repeal won’t happen – even if a Republican trifecta were to dominate the House of Representatives, the Senate and the White House following the 2016 election, Orszag said.

Orszag, who is now Citigroup’s vice chairman of Corporate and Investment Banking and chairman of the Financial Strategy and Solutions Group, shared his predictions during a Nov. 17 event for business leaders, students and faculty hosted by the Stanford Institute for Economic Policy Research.

“He connects people on the frontlines of policy,” said Mark Duggan, the institute’s director.

Orszag said Medicare and Medicaid options, which were expanded under the health law, will remain in place. But a Republican push to change the Medicaid structure of payments may, however, be able to succeed

The Affordable Care Act, the largest overhaul of the nation’s health care system in recent history, was signed into law in 2010, when Orszag was a Cabinet member under President Obama. Orszag served as the director of the OMB from January 2009 to July 2010 and was the director of the Congressional Budget Office for two years before that. He was also an economic advisor during the Clinton administration.

For years, health care costs rose faster than the American economy, spurring imbalances in the federal budget and fanning heated politicaldebates. But if the Affordable Care Act plays out as intended – closing the gaps in health insurance for Americans and making the Medicare and Medicaid systems more efficient and effective – then the nation’s overall cost of health care should decline in the long run, Orszag said, echoing the law’s supporters.

The growth in health care costs has already been slowing down in recent years, he said, though part of it may also be attributed to an economic downturn.

The Affordable Care Act is not perfect, and officials need to address problems with the high-cost areas of post-hospitalization.

The increasing political polarization of the nation made the Affordable Care Act controversial from the start, and clearly, Orszag said, it promises to be the backdrop as health care reforms under the law continue to evolve. The structural shifts in federal health care support, he said, might turn out to be a mixture of both a value-based payment system and a “block” Medicare system where providers are paid on a bundle-per-episode basis versus an individual service basis.

In any case, “the objective has to be not just to cut spending, but to cut spending in a way that doesn’t hurt people,” he said.

May Wong is a freelance writer.

More stories you might enjoy