Rising Health Care Costs Pose Challenge, CBO Report Says

Main Category: Health Insurance / Medical Insurance
Also Included In: Medicare / Medicaid / SCHIP
Article Date: 28 Aug 2007 - 2:00 PDT

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The Congressional Budget Office in a report released Thursday said that the steady growth of U.S. health care costs is making the long-term budget outlook "daunting," even though the 2007 federal deficit is projected to be lower than last year's, the AP/San Francisco Chronicle reports. According to CBO, the deficit for the fiscal year ending Sept. 30 will be about $158 billion -- $90 billion less than it was in 2006. The revised deficit figure also is about $19 billion less than the CBO projection made in March. However, the report said, "The long-term fiscal outlook continues to depend primarily on the future course of health care costs."

CBO Director Peter Orszag noted that Medicare and Medicaid take up 4.6% of the U.S. economy, a figure that is projected to rise to 5.9% by 2017 (Babington, AP/San Francisco Chronicle, 8/23). If health care spending continues to grow at its current rate of 2.5 percentage points faster than the economy as a whole, spending for the two entitlement programs could exceed 20% of the gross domestic product (Rubin, CQ Today, 8/23). Health care costs continue to put the U.S. "on an unsustainable fiscal path," Orszag said, adding that policymakers have "done much too little" to remedy the problem (AP/San Francisco Chronicle, 8/23).

The report is available online (.pdf).

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