CBO Options to Lower Budget Deficit

Today’s Managing Health Care Costs Indicator is $2.8 Trillion Dollars

The Congressional Budget Office has released its 192 page analysis  of ways to reduce the budget deficit.  Kaiser Family Foundation has redacted the document to concentrate on just the 39 pages of health care proposals.

The CBO proposals could chop over $2.8 trillion from the deficit.    They are also a road map for why it’s so difficult to make these sorts of changes.  The biggest chunk of deficit reduction comes from increased Medicare taxes, Medicare premiums, and premiums from those on military insurance.  Medicare is restricted to those over 67, and some moderate income military veterans without a service-related disability would lose Veterans Administration benefits.  Federal employees would get vouchers which would over time cover less of the cost of health care, and Medicaid subsidies to states would be slashed. The NIH research budget would be cut, and providers would see cuts. Drug companies would have to give larger rebates.  The individual mandate would be eliminated – saving dollars since fewer people would avail themselves of federal subsidies to purchase insurance.  We would have many more uninsured.  

Here’s what’s most striking about the CBO recommendations. They virtually all decrease the federal deficit without lowering the resource cost of health care. That cost is merely redistributed away from the federal government.  Almost all of the recommendations would also be vigorously opposed by important advocacy groups.

It’s not hard to come up with a list of potential ways to shift health care costs.  Lowering the overall resource costs in health care is very difficult indeed. Managing health care costs is not easy.

A brief summary of each of the initiatives with my assessment of how the deficit is lowered and who will object is at this link  
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