Blogging the CEA Report: What's Up With Medicare?
You've heard, by now, the constant refrain that entitlement reform is health reform. This next graph, also from the Council of Economic Advisers health care report, helps show why:
Two lines there. The one that shoots upwards shows the cost growth of Medicare and Medicaid. There will be no money left to fund any other priorities if trends continue. The bottom line -- the one that rises at a gentler and more manageable rate -- shows cost growth if this were just about the Baby Boomers retiring. It shows cost growth, in other words, if this were about entitlement programs rather than health care costs.
Medicare and Medicaid are becoming unaffordable because purchasing things made by the health insurance industry is becoming unaffordable. The problem is much the same for individuals in private health insurance. It's not obvious to me that health care reform, as it's currently being debated, will actually fix the entitlement problem. But what is clear is that you can't fix the entitlement problem without real health care reform.
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