Rising Health Care Costs Pose\nRising Health Care Costs Pose Challenge

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Rising Health Care Costs

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The Congressional Budget Officein a report released Thursday said that the steady growth of U.S.health care costs is making the long-term budget outlook "daunting,"even though the 2007 federal deficit is projected to be lower than lastyear's, the AP/San Francisco Chroniclereports. According to CBO, the deficit for the fiscal year ending Sept.30 will be about $158 billion -- $90 billion less than it was in 2006.The revised deficit figure also is about $19 billion less than the CBOprojection made in March. However, the report said, "The long-termfiscal outlook continues to depend primarily on the future course ofhealth care costs."

CBO Director Peter Orszag noted thatMedicare and Medicaid take up 4.6% of the U.S. economy, a figure thatis projected to rise to 5.9% by 2017 (Babington, AP/San Francisco Chronicle,8/23). If health care spending continues to grow at its current rate of2.5 percentage points faster than the economy as a whole, spending forthe two entitlement programs could exceed 20% of the gross domesticproduct (Rubin, CQ Today, 8/23). Health care costscontinue to put the U.S. "on an unsustainable fiscal path," Orszagsaid, adding that policymakers have "done much too little" to remedythe problem (AP/San Francisco Chronicle, 8/23).
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Reprinted with permission fromkaisernetwork.org.You can view the entire KaiserDaily Health Policy Report, search the archives, andsign up for email delivery at kaisernetwork.org/email. The Kaiser Daily Health Policy Report is published forkaisernetwork.org,a free service of The Henry J. Kaiser Family Foundation.

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