the long-term costs of major health care programs: fiscal implications and projection methods
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Congressional Budget Office
The Long-Term Costs of Major Health Care Programs:
Fiscal Implications and Projection MethodsPresentation to the Joint Network on theFiscal Sustainability of Health Systems,
Organisation for Economic Co-operation and Development,Paris, France
February 16, 2015
Jessica Banthin, Ph.D.Deputy Assistant Director, HealthCongressional Budget Office
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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
Who Makes Federal Budget Projections in the United States?
■ Executive branch
■ Legislative branch
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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 Projections Does the Congressional Budget Office Make?
■ 10-year baseline budget projections—three times per year
■ Long-term budget projections—once a year
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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
What Is the Purpose of CBO’s Budget Projections?
■ Illustrate implications of generally following current law
■ Serve as a benchmark for measuring proposed changes
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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
Federal Debt Held by the Public
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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
Debt Held by the Public, Total Spending, and Total Revenues
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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 Revenues
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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
Components of Total Spending
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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
Federal Spending on Major Health Care Programs, by Category
1999 2004 2009 2014 2019 2024 2029 2034 20390
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Medicare
Medicaid, Children'sHealth Insurance
Program, and Exchange Subsidies
Percentage of Gross Domestic Product
Actual Extended Baseline Projection
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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
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
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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
Changes in Population, by Age Group
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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
Causes of Projected Growth in Federal Spending for Social Security and Major Health Care Programs
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13C 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