What Would Happen if we Delayed Health Care Reform?
Bossman Steve Pearlstein had a nice column yesterday arguing that budget hawks need to handle health reform with care. The Congressional Budget Office can only evaluate things we've already done. Those, of course, are the only policies we have data on. But that poses an issue. The thing about solving problems is that the solution is frequently the thing you haven't yet tried. As one senator said to me, CBO is like someone who tells you where you're going by looking in the rearview mirror.
For all that, they do their best. And someone needs to try to attach a rigorous cost estimate to pending legislation. But it would be foolish to ignore savings that CBO can't score. Foolish and costly. Drew Altman, CEO of the Kaiser Family Foundation, has noted that major opportunities for health reform have appeared, on average, every 19.5 years. That's a long lag. I e-mailed MIT economist Jon Gruber to ask what would happen if we went another 19.5 years with no changes. He did the math:
Health spending in 2008 is projected to be 2.4 trillion. The Center for Medicare and Medicaid Services projects that by 2018 they will be $4.4 billion which is 20.3% of GDP. Extrapolating out by assuming that the growth rate from 2017 to 2018 holds, then in 18 years (2027) we will be spending $8.1 trillion and it will be 25.4% of GDP. In 20 years (2029) we will be spending $9.3 trillion which is 26.7% of GDP
In other words, health costs will own us if left unchecked. And it would be a sad irony if the agency charged with rigorously protecting the federal budget inadvertently made it impossible to address the single biggest threat to our budgetary health.
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