Congressional Budget Office Releases 2012-2022 Budget Outlook… And It’s Not Pretty
The Congressional Budget Office (CBO) released its annual Budget and Economic Outlook report Tuesday morning. This report looks at the economic outlook of the country from 2012 to 2022. Of particular interest in the report is the staggering economic and growth impact of the Medicare and Medicaid programs.
According to the 2012 report, the aging population in the US and rising health care costs will push Medicaid spending substantially higher as a percentage of the GDP. CBO estimates that spending will increase the Medicare share of GDP from a 2013 projected 3.8 percent to 4.2 percent in 2022. Medicaid, on the other hand, will grow from its current 1.7 percent of GDP to 2.5 percent in 2022. Additionally, the report concludes that by 2020, under current law, federal outlays for Medicare will exceed $1 trillion and Medicaid will total $605 billion. That is more than twice the 2012 amount of federal outlays for health care spending!
The State of the Union Apparently Lacks Health Care
During his State of the Union address last week, the President’s speech was notably light on one topic: health care. This is exceptionally shocking given that in 2010, the President signed a 2,700-page health care reform bill. However, it seems the President didn’t think it was important to discuss his highly contentious health care reform bill — giving it just two lines, or 44 words — when addressing important national topics such as the federal deficit, the struggling middle class, or job creation — all of which the Administration touted would improve thanks to the Patient Protection and Affordable Care Act (PPACA).
Given the current economic crisis facing this country, especially the hard impact felt by the middle class, most policy experts expected health care to be a major talking point in the State of the Union, just as it was in 2010 and 2011. In 2009, the President himself said at a town hall meeting, that in the long run, "Medicare and Medicaid are the single biggest drivers of the federal deficit and the federal debt by a huge margin." And he was correct.
Under Congressional Budget Office (CBO) projections, by 2035, spending per person will grow by more than $14,000, with 80 percent of that extra money being spent on health care. That’s more than triple the spending increase on all other goods and services, which is expected to grow by just 14 percent.
National expenditures on health care have been on the rise for many years, growing to $2.5 trillion in 2009, or about 18 percent of gross domestic product. Projections from the Kaiser Foundation echo this sentiment, estimating that health expenditures will grow even more over the next decade to about 20 percent of GDP by 2020. Ironically, those approximations were released about the same time that CBO estimates were released to the media, showing that the current Presidential budget, including PPACA, will bankrupt the Medicare program.
When American approval ratings of the government and PPACA are at all-time lows, it actually makes sense that the President would shift focus to other topics. Clearly his lack of health care related rhetoric in the State of the Union indicates that the White House is trying to give Americans hope for the future, and they are well aware that health care reform hasn’t been doing the trick. It also indicates what many critics have been saying for almost two years: that PPACA isn’t going to reform Medicare and Medicaid into long-term sustainable programs nor will it dramatically improve health care and costs.
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