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View Diary: America’s health care cost slowdown and the disappearing debt (66 comments)

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  •  See The Third Chart in the Diary... (7+ / 0-)

    ...to get a better illustration of the issue here.  That's the chart that shows "Projected Medicare Spending as a Percentage of GDP, 2013-2085."

    You're absolutely right that the national debt is increasing.  But the CBO projections going forward use a higher growth rate for health care costs than the U.S. has experienced is recent years.  But if the current trends continued, federal health care spending (and Medicare in particular, as shown in the chart) will constitute a much smaller percentage of GDP than it is currently projected.

    So, while the entire national debt certainly would not disappear, trillions of dollars of it might.  Which means policymakers wanted to slash Medicare to "fix the debt" now could be making an historic and unnecessary mistake.

    •  No. Trillions of dollars will not disappear. (4+ / 0-)
      Recommended by:
      nextstep, Mister T, Denver11, hmi

      Less money will be spent on Medicare.
      Depending on the actions of employers, that may or may not be made up on ACA subsidies.

      Whether or not it is, the debt is growing and, according to the report you linked, will grow at an increasing rate after a short-term slowdown.

      As to slowdowns in medical spending, here is the CBO outlook:

      The growth of health care spending cannot exceed economic growth indefinitely, because if it did, total spending on health care would eventually account for all of the
      country’s economic output—an impossible outcome.
      [...]
      Thus, even in the absence of changes in federal law,
      growth in per capita spending on Medicaid and on health
      care financed through the private sector will gradually
      slow. The rate of growth of Medicare spending per beneficiary is also likely to slow, though to a lesser extent, even without changes in federal law—reflecting changes in
      medical practices common to all patients ...
      In other words, growth in medical costs will slow down because we simply won't be able to pay higher prices any more.  Frankly, I'm amazed that fewer people make the link between the incredibly high prices we pay now and the sluggish economy.

      LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

      by dinotrac on Sun Nov 24, 2013 at 02:12:46 PM PST

      [ Parent ]

      •  It's Worth Checking Out the CEA Report... (3+ / 0-)
        Recommended by:
        1BQ, TXdem, deepeco

        ...summarized here.

        For starters, Uncle Sam is already savings tens of billions of dollars just compared to projections from 2010:

        The recent slow growth in health care spending has substantially improved the long-term Federal budget outlook: The Congressional Budget Office has reduced its projections of future Medicare and Medicaid spending in 2020 by $147 billion (0.6 percent of GDP) since August 2010.  This represents about a 10 percent reduction in projected spending on these programs.
        And the benefits, if these lower-than-expected growth rates continue, are potentially substantial:
        In the short run, slower growth in health spending is a positive for employment: The slow growth in health care costs has reduced employers’ benefit costs, increasing firms’ incentives to hire additional workers.  Available estimates suggest that these gains could be substantial, although their magnitude is uncertain.

        Over the long run, slower growth in health spending translates directly into higher wages and living standards: If just half the recent slowdown in spending can be sustained, health care spending a decade from now will be lower by $1,400 per person, a benefit that workers will realize in the form of higher wages and that federal and state governments will realize in the form of lower costs.

        •  "Saving from projections" - also known as -- (0+ / 0-)

          the projections were wrong.

          LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

          by dinotrac on Sun Nov 24, 2013 at 07:48:51 PM PST

          [ Parent ]

        •  More likely a benefit that employers will realize (0+ / 0-)

          in reduced spending on personnel costs. There's no incentive for them to use it to increase wages.

          "All governments lie, but disaster lies in wait for countries whose officials smoke the same hashish they give out." --I.F. Stone

          by Alice in Florida on Sun Nov 24, 2013 at 08:40:56 PM PST

          [ Parent ]

        •  Health Care Costs Declining (0+ / 0-)

          Anyone that believes that any savings in health care costs, on the part of employers, will be passed on to employees, via higher wages and benefit packages -- those people must still believe in the tooth fairy.  Like everything else, any extra money will go right into the pockets of the corporations.  The 1% will do great, while the rest of us will still suck on the hind t*t.

      •  the CBO does (0+ / 0-)

        CBO does not say cost will go down because we simply won't be able to pay.  

    •  That's a lot of "ifs" (1+ / 0-)
      Recommended by:
      hmi

      A more accurate HL would be "If a lot of things turn out differently than the CBO says the debt might go down".  

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