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On Our Way To Slowing The Growth Rate?

By Igor Volsky  

"On Our Way To Slowing The Growth Rate?"

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The next time you hear somebody say that the Affordable Care Act increases health spending or bends the cost curve up, just show them this nifty chart compiled by my colleagues at the Center for American Progress, which shows just how the law begins to lower Medicare spending:

- $100.4 billion: The amount of federal deficit reduction from 2010 to 2019 due to new revenue sources for the Medicare trust funds under ACA.

- 24 percent: The decrease in Medicare’s share of GDP under ACA provisions. Before the passage of comprehensive health care reform, the portion of GDP assumed by total Medicare spending in 2035 would have been 7.2 percent. With ACA provisions, however, this portion decreases to 5.5 percent.

- 7.5 percent: The portion of baseline Medicare spending that will be saved from 2011 to 2019.

The chart:

Of course, now that we’ve petted ourselves on the back for doing better than pre-reform Austin Frakt would have us look forward and argues that even with these savings, health care costs are still unsustainable:

Federal spending and revenue projections as a percent of GDP: Alternative Fiscal Scenario

CBO2010-alt-fisc-AF2

All of this is a bit daunting when you realize that many of the policies that lead to the reductions in the first graph haven’t even been implemented and can even be reversed by weak lawmakers who will undoubtedly face intense lobbying pressure from providers, insurers, and others. Part of that is because the cost-cutting part of the law may not be specific enough. As Tom Daschle pointed out yesterday, “We lay out a very clear 10-year schedule, with great specificity about how insurance reform is going to work…[but] we don’t do that nearly as much with cost-containment and with delivery reforms.” “I think we could have put into the legislation specific targets and actions that would be required have to do with unnecessary care, in terms of primary care, transparency and even a more ambitious and delineated schedule for HIT, moving away from fee-for-service.”

But of course if we want to keep the country from going bankrupt we’ll need to keep lawmakers accountable and pave the way for more reforms.

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