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.
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