Health Care Costs Will Consume US Economy

Armen Hareyan's picture

Health Care Costs


Estimated increases in care spending in future decades will place the federal budget on an"unsustainable path," which might "seriously harm theeconomy" 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, Medicareand Medicaid spending will increase by an estimated 500% growth over the next75 years (Kreisher, CongressDaily, 12/13).

At a House Budget Committee hearing on Thursday, CBO DirectorPeter Orszag said, "To prevent deficits from growing to levels that couldimpose substantial costs on the economy, revenues must rise as a share of grossdomestic product or projected spending must fall" (Wall StreetJournal, 12/14). Orszag said that a comparison of the differences inhealth care costs in different areas of the nation indicates the possibilityfor reduced costs. In addition, he said that the U.S. could reduce health carespending by significant amounts with a focus on "strong financialincentives" for "better care," rather than for more care.

Committee Democrats and Republicans "took different views of the crisisCBO predicted, with Democrats focusing more on how to save the entitlementprograms and Republicans expressing concerns about the tax increases that mightbe needed to reduce the crushing federal debt," according to CongressDaily(CongressDaily, 12/13).

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