In yesterday's Washington Post, Robert Samuelson explores the unsolved "health spending mystery," whether the recent slowdown in health care spending growth is a permanent result of structural changes in health care, or just a temporary aberration from the recession. Samuelson's piece was prompted by a recent White House
A recent report from Scott Lilly at the Center for American Progress (CAP) makes the case that policymakers have only two real choices to respond to the future growth in debt levels: slash retirement benefits or raise taxes. The CAP paper rightly identifies the source of debt growth as the continued growth in Social Security, Medicare, and Medicaid, not discretionary or other mandatory spending.
As we've written many times before, the U.S. population is aging and in doing so putting increasing pressure on Social Security, Medicare, and to some extent Medicaid. In part, this is due to rising life expectancy which has increased markedly over the last century from 47 years in 1900 to 79 years today.
As we have written before, the recent downward turn in the growth of health care costs is an encouraging development, but one that may not last in the long term. Historically, such slowdowns in health expenditures tend to last only temporarily, and an aging population will once again lead to escalating health care spending in the next decade even if per-capita cost growth remains relatively subdued.
Early this month, the Obama Administration announced that it would delay enforcement of the employer mandate penalty in the Affordable Care Act for 2014. The employer mandate would have required employers with 50 or more full time workers to pay $2,000 to $3,000 per employee if any of their workers did not receive an affordable offer from the employer and instead obtained subsidized health insurance coverage through a health insurance exchange. The first 30 workers are exempted in calculating the penalty.
Last week at Knox College, President Obama gave the first of a series of speeches on the economy. He called on Washington to pass policies that would give middle class families a "better shot" in the global economy, emphasizing education, investments, and research.
Recently, there has been some discussion of taking the employer-sponsored health exclusion off the table in tax reform. But for those interested in tax reform, health reform, or deficit reduction, doing so would be a mistake.
Yesterday, the Obama administration announced the one-year delay of a key provision of the Affordable Care Act that requires coverage reporting and penalizes large employers who do not offer health insurance.
It's no secret that getting health care spending under control will be key for the federal budget. Nearly one out of every four federal program dollars goes to health care, and even though growth has slowed recently, it is expected that it will pick up again at least to some extent as the economy improves.