CBO’s Projections of Federal Health Care Spending

CBO’s baseline projections from August 2010—the first projections published after enactment of the Affordable Care Act—spanned the period from 2010 to 2020. At that time, the agency estimated that mandatory outlays for the two broad budget categories covering the major health care programs—function 550 (Health), mostly for the Medicaid program, and function 570 (Medicare, net of premiums and other offsetting receipts)—would be $11.7 trillion over the 2010–2020 period (see Table 1 on page 11).1 Actual mandatory outlays for those categories turned out to be $10.6 trillion over that period, or 9 percent less than the amount CBO projected in 2010; the difference between projected and actual mandatory outlays was 12 percent for function 550 and 7 percent for function 570. For 2019, the last year covered in the agency’s August 2010 projections that was unaffected by the coronavirus pandemic, mandatory outlays for budget functions 550 and 570 turned out to be $1.2 trillion, which was 17 percent lower than the agency had projected in 2010.

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CBO’s 2010 projections of federal outlays for the major health care programs in 2021 and 2022 can be compared with actual outlays for those years. In the long-term projections it made in 2010, CBO estimated that federal outlays for the major health care programs would account for 6.5 percent of GDP in 2021 and 6.6 percent of GDP in 2022. Actual outlays for those programs turned out to be 5.7 percent of GDP in both years.

Additionally, CBO’s 2010 projections of federal outlays for the major health care programs over the 2023–2033 period can be compared with CBO’s current baseline projections. In its long-term projections made in 2010, the agency estimated that those outlays would increase from 6.8 percent of GDP in 2023 to 8.5 percent of GDP in 2033. CBO now expects federal spending on those programs, measured as a percentage of GDP, to grow more slowly over that 10-year period, increasing from 5.8 percent of GDP in 2023 to 6.9 percent of GDP in 2033 (see Figure 1 on page 12).

Those sets of comparisons show that the rate of growth in federal spending on the major health care programs has slowed significantly since 2010 and that growth is expected to remain slower (relative to CBO’s 2010 projections) over the next decade.

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Greenbeard said:

Interesting letter out from the CBO today in response to a question from Sheldon Whitehouse as to how accurate their projections of federal health care spending after 2010 turned out to be: CBO’s Projections of Federal Health Care Spending.

No real news here (though I'm sure it's news to some), their conclusion is something I've mentioned often: they massively overestimated health care costs for the post-2010 (i.e., Affordable Care Act) era.




No knock on them, they do the best they can and nobody back then was predicting the ACA-era health care cost growth slowdown, not even the law's most vocal boosters.

But man, their projections in 2009 and 2010 were taken so seriously, breathlessly reported by news outlets and seized on by Congress to refine and iterate the health reform bills over and over again. Stuff was cut from the ACA or prevented from being included in it--supports that would've helped people and made care more affordable for lots of people over the past decade--on the basis of those projections. All to keep down the law's price tag, which we now know was vastly overestimated. Tough pill to swallow.

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mrjurrs said:

Now it is time to amend the law and improve it based on new evidence. We'll put in a sentence that prevents doctors from wearing drag while they are treating patients and elected R's will fall all over themselves to vote for it...

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Greenbeard said:

Agreed, though the process of building on the ACA is well underway. The current administration's been doing it through regulatory and legislative steps to make what's in it work better, and through regulatory and legislative steps to start tackling some of the unfinished business it didn't address (e.g., antitrust enforcement and tackling prescription drug prices).

Five Things to Know about the Renewal of Extra Affordable Care Act Subsidies in the Inflation Reduction Act | KFF

As part of the Inflation Reduction Act, the Senate recently passed a three-year extension (through 2025) of enhanced subsidies for people buying their own health coverage on the Affordable Care Act Marketplaces. The enhanced subsidies increase the amount of financial help available to those...

www.kff.org

Biden administration finalizes Obamacare 'family glitch' fix

The Biden administration on Tuesday finalized a rule it said would fix the so-called family glitch in the Affordable Care Act that priced many people out of health insurance and would help over a million Americans.

www.reuters.com

An overhaul for Medicare's pay transformation program

The Biden administration is trying to jump start a Medicare program that pays health providers based on patient outcomes rather than by how many services they perform.

www.axios.com

Numbers Don’t Lie. Biden Kept His Promise on Improving Obamacare. - KFF Health News

KHN has teamed up with our partners at PolitiFact to monitor 100 key promises made by Joe Biden during the 2020 presidential campaign — including those surrounding the Affordable Care Act.

khn.org

Biden says his administration is focused on lowering prescription drug costs

The administration announced penalties on pharmaceutical companies that raised prices for certain drugs faster than inflation, which will lower coinsurance payments for Medicare beneficiaries.

www.nbcnews.com

Biden’s FTC Has Blocked 4 Hospital Mergers and Is Poised to Thwart More Consolidation Attempts - KFF Health News

The president has directed the Federal Trade Commission to carefully consider health industry mergers that may stymie competition and drive up prices. The new Democratic majority appears eager to look beyond traditional hospital consolidations to deals that involve products, services, or staffing.

khn.org

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mrjurrs said:

Lots of good news in that post!

I cannot understand how elected R's have convinced their constituents that no health coverage is better than the ACA.

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Greenbeard said:

Outside of the most diehard rightwing koolaid-drinkers, I think at this point it's pretty clear that the GOP has failed miserably in that decade-long quest. Boasting about trying to destroy the ACA is now (rightly) seen as fringe and is something most in the GOP have learned to stop doing openly.

Biden Dares Republicans to Go After Obamacare and Medicaid

It’s part of campaign to smoke out and then attack unpopular Republican cuts.

nymag.com

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mrjurrs said:

I cannot understand how elected R's have convinced their constituents that no health coverage is better than the ACA.

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PeacefulWarrior said:

They call those folks "useful idiots".

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mrjurrs said:

You're right but...
"To date, 40 states (including DC) have adopted the Medicaid expansion and 11 states have not adopted the expansion. Current status for each state is based on KFF tracking and analysis of state expansion activity."

Status of State Medicaid Expansion Decisions | KFF

This page displays an interactive map of the current status of state decisions on the Affordable Care Act's Medicaid expansion. Additional Medicaid expansion resources are listed (with links) below the map.

www.kff.org

I thought about running a contest to see who could name the 11 states but there would have been too many winners...(One of these 12 have expanded medicaid in the last year)
"As of the time of writing, only 12 states have not done so: Alabama, Florida, Georgia, Kansas, Mississippi, North Carolina, South Carolina, South Dakota, Tennessee, Texas, Wisconsin, and Wyoming."

3.7 Million People Would Gain Health Coverage in 2023 If the Remaining 12 States Were to Expand Medicaid Eligibility

Under the Affordable Care Act, states have the option to expand Medicaid eligibility to nonelderly people with incomes up to 138 percent of the federal poverty level.

www.urban.org

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Greenbeard said:

True, but the number dwindles every year. As you point out, like several other deep red electorates, South Dakota's voters recently overruled their elected leaders to expand Medicaid at the ballot box.

North Carolina is about to expand North Carolina, with final passage of the legislation as soon as this week.

North Carolina Medicaid expansion agreement clears Senate

A bipartisan agreement to expand Medicaid coverage to more low-income adults while loosening or ending several regulatory hurdles to building more health care facilities could get its final votes next week after clearing the Senate on Wednesday.

www.wfae.org

And even Wyoming keeps flirting with expansion (though this year's attempt again did not succeed).

Wyoming House committee advances Medicaid Expansion bill

A legislative committee advanced a bill to expand Medicaid in Wyoming, paving the way for a familiar fight on the House floor.

www.wyomingpublicmedia.org

Slow and steady.

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8085 said:

And a diagram I found of the top level components of the US health care system:

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Greenbeard said:

That's a very silly graphic.

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Mach said:

"The United States spends a larger share of its gross domestic product (GDP) on health care than other advanced economies and performs worse on various measures of health outcomes than many of those same countries. In 2019, U.S. health expenditures were 17.6 percent of GDP, nearly 7 percentage points higher than the average of other comparably wealthy countries"

Such a sad reality.

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8085 said:

Do you mean what the graphic refers to is silly, or the graphic is badly drawn, or there is too much for one page, or some other issue?

There are documents describing various functions within the diagram; I was directed to SSA 1902 and SSA 1905 and both are well worth a quick look.

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8085 said:

When my case for healthcare was rejected, I was told to refer to SSA 1902 and SSA 1905 and other documents.

I read each and the other documents trying to determine my eligibility but was amazed at how different the writing styles were and how needlessly complex the design of the system is.

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8085 said:

I've been very impressed by everyone I've met working in the US health care system and I'm fairly confident that without the exceptional people working in it that the system would not work at all.

The people are great, the system sucks.

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