Medicare Monster

Health care report

The federal budget's biggest problem can be summarized in two words: health care.

In a brief slideshow analysis of federal health care policy, the Congressional Budget Office (CBO) warned in February 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 pointed out that even after Obamacare is fully implemented, Medicare will still have the largest appetite for federal health care dollars. The program is expected to consume $894 billion in 2023, compared to $560 billion for Medicaid and the Children's Health Insurance Program and $135 billion for Obamacare's subsidies and related items.

And health spending may eat a bigger chunk of the budget than predicted. Not only is Medicare spending projected to rise dramatically in years to come, but projections of future spending on the program have been repeatedly revised upward by the CBO.

The CBO presentation examined suggestions for cost controls that "might (or might not) help the federal budget," including capping federal Medicaid payments and paying less to medical providers. Both ideas have potential snafus. The federal government has been actively pushing to expand Medicaid rolls, and the low reimbursement offered to providers by the Obamacare exchange plans are already leading to physician shortages like the ones suffered by Medicare and Medicaid.