Medicare and health care costs were an insignificant part of the budget talks. If health care costs keep growing faster than GDP, can we ever come up with a solid debt deal?
Harry Hamburg / AP / File
While jogging this morning, I heard an interesting discussion/debate on the “On Point” radio show between Dean Baker and Steve Bell (also, listen to the opening where Major Garrett shares some worthy insights into the debt deal—his first lesson from the deal is dead on: “A new precedent. Debt-ceiling increases are now tied to deficit reduction.”)
One part that interested me was their discussion of health care and its role—or lack thereof—in the budget debate. As long as health care costs keep growing two percent faster than GDP, which has been the trend for years now, there’s no clever debt deal that “gets our fiscal house in order.”
So, if we wanted to have a discussion about actually changing out budget trajectory, we’d have to talk health care (we’d also have to talk revenues, but that’s another discussion). And here, an important concept here is cost-shifting versus cost-saving.
Given all the talk of the budget pressure from health care entitlements—Medicare and Medicaid—it’s easy to forget that our affordability problem is as much a private sector as it is a public sector problem. If anything, costs in the public programs have consistently grown more slowly than those in the private sector (which makes sense when you think about overhead, like advertising and profits).