William_T._Bianco,_David_T._Canon]_American_Polit

600 Chapter 16Chapter 16 || Social PolicySocial Policy

liabilities through 2093, or the amount of additional money (beyond the current payroll

tax) required to fund all the program’s commitments, is $16.1 trillion, and Medicare

has unfunded liabilities of $37.7 trillion.^58 Even though such projections depend on

assumptions about future economic performance, demographic trends, and other

uncertain variables, the relative difference between the two programs is significant.

Medicare’s troubles are more than twice as serious as Social Security’s! Although the

long-term Medicare deficit is huge, the projected unfunded liabilities were cut in half

by the ACA. However, the trustees noted that their projections assume that cuts in

Medicare reimbursements mandated in the new health care law will stick. The report

expressed skepticism that this would happen.^59

Another study by the nonpartisan CBO shows that federal spending on health care

(including Medicare, Medicaid, and subsidies for the new health insurance exchanges)

will continue to grow through 2048 (see Figure 16.7). The CBO estimates that by

2046 federal spending on health care, Social Security, and interest on the debt will

reach 21.8 percent of GDP. That is, if the size of the federal government stays around

its historic average of 20 percent of GDP, the two major social-policy programs will

constitute all of noninterest federal spending by 2048. The choices are clear: either

everything else must be cut from the budget (defense, education, transportation),

health care costs and Social Security must be reined in, or the size of government will

grow. Clearly, the current trends are not sustainable.

Health Care Reform Central to President Obama’s 2008 campaign platform was

reforming America’s health care system. Upon election in 2009, he outlined several

goals: controlling health care costs, providing health insurance for more Americans (as

close to universal coverage as possible), and paying for the program without adding to

the deficit. He then urged Congress to hammer out the details.

In formulating the legislation, Congress sifted through hundreds of options

that represent three main types of systems: (1) national single-payer plans,

FIGURE

16.7

0

5

10

15%

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045

Major health care programs

Other noninterest spending

Social Security

Net interest

Actual Projected

Source: Congressional Budget Office, “The 2018 Long-Term Budget Outlook,” Figure 2, p. 7, http://www.cbo.gov (accessed 7/5/18).

Projected National Spending on Health Care

(Percentage of GDP)

If current spending patterns hold, an increasing percentage of federal spending will be devoted to health care, crowding out other

programs. Clearly, such trends are not sustainable. What changes do you support to reduce health care spending in the long run?

DID YOU KNOW?

Sixty percent of uninsured

Americans can get health care

coverage for

$100

or less per month and 87 percent of

those with a marketplace account

get some assistance.

Source: ObamacareFacts.com

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