Health Care Spending Will Gobble the Federal Budget, Warns CBO


In a brief, slideshow analysis of federal health care policy, the Congressional Budget Office warns that "federal spending for health care programs is growing much faster than other federal spending and the economy as a whole." That's partially because of the Affordable Care Act, though the CBO points out that, even after Obamacare is fully implemented, Medicare will continue to have the largest appetite for federal dollars intended to support health care (intentions and results aren't the same thing, of course.) The CBO contemplates a few cost-cutting tactics, few of which are likely to win fans, and some of which might simply torpedo the provision of health care.

Health care expenditures

Ever-growing expenditures without revenues or even an economy to match are a bit of a problem, as the CBO has attempted to explain in the past, using words such as "unsustainable."

Medicare spending growth
Mercatus Center

Despite all of the attention paid to Obamacare's economic idiocy, technical failures, and general incompetence as a piece of policy, it doesn't represent a big portion of the federal government's projected spending spree on health care issues. Most of that money will go to the elderly, with Medicare expected to consume $894 billion in 2023, compared to $560 billion for Medicaid and CHIP, and $135 billion for Exchange subsidies and related items.

Using CBO numbers in 2009, the Mercatus Center's Veronique de Rugy prepared the graph above, which shows Medicare spending turning into the monster that eats…everything over the next few decades. Note that projections of Medicare spending keep rising, and rather quickly.

Since all of this looks to get spendy—well, spendier—really fast, the CBO contemplates a few approaches for trimming the price tag which "might (or might not) help the federal budget." Among those are taxing, bribing, and nagging people into healthier behavior, capping federal Medicaid payments (an approach that would kneecap the current push to expand Medicaid rolls), and paying less to medical providers.

It's a good thing crappy compensation from government programs isn't already an issue for physicians. Oh…wait.

Oh, yes. Look for the federal government's forays into health policy to be an ever-more expensive problem in years to come.