Tuesday, July 31, 2012
Health Care Costs and Obamacare
I have a new column at e21 rebutting Christine Romer’s latest defense of Obamacare’s cost control mechanisms:
Romer is right that rapidly rising health costs is the most serious threat to the nation’s long-term prosperity. Already, the rapid run-up in federal health entitlement spending is putting tremendous pressure on the federal budget. Between 1972 and 2011, federal spending on Medicare and Medicaid rose from 1.1 percent of GDP to 5.5 percent, according to the Congressional Budget Office (CBO). CBO’s latest projections indicate that spending on these programs, plus ObamaCare’s new entitlement spending, will push total health entitlement spending up to at least 8.4 percent of GDP by 2030. That’s a jump in spending of nearly 3 percentage points of GDP compared to today’s level — or the equivalent of another $500 billion in budget outlays.
But although Romer is right about the severity of the problem, she is dead wrong about ObamaCare’s role in addressing it. ObamaCare did not lay the foundation for sensible cost control, and did not partially ease budgetary pressures, as she asserts. Quite the contrary, ObamaCare will pour an ocean of gasoline on the health entitlement fire, and the supposed cost-control mechanisms are a mirage.
The rest of the column is here.