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The Long-Term Costs of Major Health Care Programs: Fiscal Implications and Projection Methods

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The Long-Term Costs of Major Health Care Programs: Fiscal Implications and Projection Methods

The Long-Term Costs of Major Health Care Programs: Fiscal Implications and Projection Methods

  1. 1. Congressional Budget Office The Long-Term Costs of Major Health Care Programs: Fiscal Implications and Projection Methods Presentation to the Joint Network on the Fiscal Sustainability of Health Systems, Organisation for Economic Co-operation and Development, Paris, France February 16, 2015 Jessica Banthin, Ph.D. Deputy Assistant Director, Health Congressional Budget Office
  2. 2. 1C O N G R E S S I O N A L B U D G E T O F F I C E Who Makes Federal Budget Projections in the United States? ■ Executive branch ■ Legislative branch
  3. 3. 2C O N G R E S S I O N A L B U D G E T O F F I C E What Projections Does the Congressional Budget Office Make? ■ 10-year baseline budget projections—three times per year ■ Long-term budget projections—once a year
  4. 4. 3C O N G R E S S I O N A L B U D G E T O F F I C E What Is the Purpose of CBO’s Budget Projections? ■ Illustrate implications of generally following current law ■ Serve as a benchmark for measuring proposed changes
  5. 5. 4C O N G R E S S I O N A L B U D G E T O F F I C E Federal Debt Held by the Public
  6. 6. 5C O N G R E S S I O N A L B U D G E T O F F I C E Debt Held by the Public, Total Spending, and Total Revenues
  7. 7. 6C O N G R E S S I O N A L B U D G E T O F F I C E Components of Total Revenues
  8. 8. 7C O N G R E S S I O N A L B U D G E T O F F I C E Components of Total Spending
  9. 9. 8C O N G R E S S I O N A L B U D G E T O F F I C E Federal Spending on Major Health Care Programs, by Category 1999 2004 2009 2014 2019 2024 2029 2034 2039 0 1 2 3 4 5 6 7 8 Medicare Medicaid, Children's Health Insurance Program, and Exchange Subsidies Percentage of Gross Domestic Product Actual Extended Baseline Projection
  10. 10. 9C O N G R E S S I O N A L B U D G E T O F F I C E How is Health Care Spending Projected? ■ Next 10 years: detailed analysis of programs ■ Later years: fairly mechanical estimates – Number of people who will receive benefits – Growth in spending per beneficiary
  11. 11. 10C O N G R E S S I O N A L B U D G E T O F F I C E Changes in Population, by Age Group
  12. 12. 11C O N G R E S S I O N A L B U D G E T O F F I C E Causes of Projected Growth in Federal Spending for Social Security and Major Health Care Programs
  13. 13. 12C O N G R E S S I O N A L B U D G E T O F F I C E Possible Approaches to Reducing Federal Health Care Spending ■ Improve the health of the population ■ Reduce federal subsidies for health insurance ■ Reduce tax preferences for employment-based health insurance ■ Pay Medicare providers in different ways ■ Make larger structural changes to federal health care programs ■ Undertake other possible reforms

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