Elmendorf on Options

Doug Elmendorf, Director of CBO gave a speech this morning to the World Health Congress on the challenges of restraining federal health spending.  He didn’t use slides, but clearly outlined some of the possibilities.  One of them was carrying through on the ACA, and looking for further ways to address costs.  He then outlined five other possibilities to restrain federal health spending (that he said are not exhaustive):

  • Reverse the expansion of Medicaid and the subsidies for purchasing insurance that were enacted in last year’s legislation.
  • Reduce the number of beneficiaries of federal health programs; he mentioned slowly raising the Medicare age to 67, and block-granting Medicaid which he assumed would lead to cut backs in eligibility.
  • Increase the premiums or cost-sharing amounts paid by Medicare beneficiaries.
  • Allow Medicare to take costs into account in its coverage decisions.
  • Cut back on tax expenditures rather than on direct outlays.  The largest tax expenditure is the exclusion from taxable income of employers’ contributions for health care, health insurance premiums, and long-term care insurance premiums.

He includes all the usual qualifiers that CBO doesn’t make policy, but that they assess the likely impact of policies proposed by Congress.  And he discusses the trade-offs between slowing spending via the routes noted above and achieving other goals, such as expanding insurance coverage.  A clear overview of many of the big choices available.  There is no easy way out or it would have already been found.

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