Budget Chief: Health Costs Could Bring Economic Harm
Estimated increases in U.S. health care spending in future decades will place the federal budget on an "unsustainable path," which might "seriously harm the economy" without significant reductions in spending or increases in revenue, according to a report released on Thursday by the Congressional Budget Office, CongressDaily reports. According to the report, Medicare and Medicaid spending will increase by an estimated 500% growth over the next 75 years (Kreisher, CongressDaily, 12/13).
At a House Budget Committee hearing on Thursday, CBO Director Peter Orszag said, "To prevent deficits from growing to levels that could impose substantial costs on the economy, revenues must rise as a share of gross domestic product or projected spending must fall" (Wall Street Journal, 12/14). Orszag said that a comparison of the differences in health care costs in different areas of the nation indicates the possibility for reduced costs. In addition, he said that the U.S. could reduce health care spending by significant amounts with a focus on "strong financial incentives" for "better care," rather than for more care.
Committee Democrats and Republicans "took different views of the crisis CBO predicted, with Democrats focusing more on how to save the entitlement programs and Republicans expressing concerns about the tax increases that might be needed to reduce the crushing federal debt," according to CongressDaily (CongressDaily, 12/13).