The financial impact of entitlements

Failure to reform entitlement programs along with adding a new one in the form of Obamacare is about to have dire consequences.

The United States faces financial collapse due to out-of-control government spending, and entitlement programs have a lot to do with it. Washington has promised more than it could ever possibly deliver.

Medicare in particular puts the government on the hook for $38 trillion in long-term unfunded liabilities, and reform to address this is sorely needed. Change must address not only spending but also the system by which the program operates, which currently encourages inefficient use of health services. This trend has penetrated the health care system at large.

According to the Obama Administration, the health care overhaul passed in March addressed the need for entitlement reform. However, at a recent event hosted by the Galen Institute, expert James Capretta introduced his research that shows that this is not the case.

Peter Orszag, Director of the Office of Management and Budget, identified the main driver of increased spending in Medicare as soaring costs in the health care system at large. This argument was used to claim that Obamacare would “bend the cost curve,” reducing federal commitments and overall health spending.

But Capretta points out that the Administration was incorrect in this assessment. He writes thatCBO’s long-term budget projections from last year show that before enactment of the health law, population aging would be responsible for at least 56 percent of the spending growth for the major entitlement programs between now and 2035, and rising health care costs would account for just 32 percent of the cost growth.” (Source: The Foundry)

When will Republicans, including those running for office this year, wake up and start embracing promoting Paul Ryan‘s “Roadmap” which addresses this issue?

Powered by ScribeFire.

Enhanced by Zemanta