Q. Isn’t health reform going to put more burdens on federal and state governments because we will be covering more people without insurance?
A. Controlling health spending is critical for the fiscal health of the federal government and the states. For example, health care spending today consumes 30 percent more of state and local budgets than it did 20 years ago, forcing governments to choose between cutting services and raising taxes.
And the Council of Economic Advisors recently released a sobering report on the impact of health care spending on the federal government. It found that if we do nothing by 2019,
Health care expenditures will be 21 percent of GDP—one fifth of our economic output.
Spending on Medicare and Medicaid will be 8 percent of GDP.
Nineteen percent of the non-elderly population, or 54 million Americans, will be uninsured. The cost of caring for the uninsured burdens all of us. Families with insurance pay a hidden tax of $1000 to cover the cost of uncompensated care in this country.
For working Americans who rely on employer-sponsored health insurance, rising costs mean that an even greater proportion of their compensation will be in the form of health benefits rather than take-home pay. In ten years, the estimated percentage of average total worker compensation that comes in the form of health insurance will be 26 percent.
Resources that are devoted to health care cannot be used to provide the other goods and services that Americans want, including education, investment, and infrastructure.
The federal deficit will continue to rise and, if meaningful health care reform is not enacted, more painful choices about how to deal with our unsustainable fiscal situation will be unavoidable in the future.
That is why the President has been clear that he will not sign a health care reform bill unless it is deficit neutral and on a stable trajectory as the decade ends.
We have to expand coverage and bring down costs for families as well as transform health care so that it costs less and delivers high quality in years to come. Adding more people to a broken system will only cost us more in the long run. Read more