Another $750 billion per year is like fighting 5 Iraq wars at once. Big money. Will younger folks agree to the taxes to fund it?
The federal government will spend twice as much on health care in 2017 as it did in 2007, as costs keep going up and as Boomers enroll in Medicare. The toll: federal outlays for Medicare and Medicaid will hit $1.5 trillion, up from $750 billion last year, according to an estimate published today in Health Affairs.
Somehow this huge increase in tax-funded spending just isn't enough for the Democrats.
The estimates donít take into account the expanded role the feds would play under the Democratic presidential candidates health care proposals, which would cost about $100 billion a year, the WSJ notes. But once youíre at $1.5 trillion, the leap to $1.6 trillion doesnít seem so vast.
Once you are at $1.5 trillion politicians will lose the ability to increase spending without increasing taxes.
The outlook for national health spending calls for continued steady growth. Spending growth is projected to be 6.7 percent in 2007, similar to its rate in 2006. Average annual growth over the projection period is expected to be 6.7 percent. Slower growth in private spending toward the end of the period is expected to be offset by stronger growth in public spending. The health share of gross domestic product (GDP) is expected to increase to 16.3 percent in 2007 and then rise throughout the projection period, reaching 19.5 percent of GDP by 2017.
Taxpayers will pay more in taxes to fund all this. You looking forward to a decline in your living standard?
This projection is based on a US economic growth rate in the next 10 years that seems overly optimistic.
"At the same time, we are expecting economic growth to slow to an average annual rate of 4.7 percent. As a result, the combination of steady health spending growth and slowing economic growth will lead to the health care part of gross domestic product rising to nearly 20 percent by 2017, nearly one-fifth of the economy, Sisko said.
A slower growth rate in the total economy would cause a same dollar amount of increased medical care spending to take up a far larger percentage of the economy.
|Share |||By Randall Parker at 2008 February 26 10:13 PM Economics Health|