While it’s certainly not a good thing for those receiving it, a $160-billion net decrease from earlier projected federal healthcare spending estimates helped slow “the federal government's expected accumulation of debt over the coming decade,” according to Congress' budget scorekeeper.
In fact, this change, along with others, in projected healthcare spending, was expected to contribute to the federal government's somewhat improved 10-year fiscal outlook.
Though projections that spending on Medicare and Medicaid providers will increase over the coming decade by $163 billion more than previously expected, there will still be a decrease in funding, according to a revised outlook from the Congressional Budget Office (CBO), according to a report by Rich Daly.
Lower than expected productivity gains and higher costs in the healthcare sector led to the increase over CBO projections released in March. “Specifically, the automatic provider updates, which are tied to changes in the prices of labor, goods and services in the healthcare sector and offset by expected productivity gains, were projected to increase by $136 billion, or about 2 [percent] in Medicare and by $27 billion in Medicaid,” Daly wrote.But the fiscal effects of the recent U.S. Supreme Court’s decision to uphold the healthcare law offset those increases because the law effectively made the Medicaid expansion optional.
That, in turn, reportedly lowered the expected federal costs of the law. “Specifically, the CBO projected $325 billion, or 7 percent, less federal Medicaid spending over the next 10 years in part because some states are not expected to expand their programs.”
As Jonathan Cohn noted at The New Republic, “States are under no obligation to take the money or be part of Medicaid; they can walk away from this deal, in its entirety, if they want.”
Ben Tracy at CBS News revealed that the Supreme Court ruled that each state is on its own in deciding whether they want to expand their Medicaid rolls. States opposed to the expansion of the program said it would have placed an undue burden on them, and the court agreed, writing in its opinion that the provision was like a "gun to the head of the states,” Tracy quoted the justices.
However, the same Medicaid reduction also will increase the number of people expected to enroll in the coming health insurance exchanges and the amount expected to be spent on income-based subsidies, which was expected to increase by $164 billion over the next 10 years, according to Daly. “The final savings offset was projected to come from a slowdown in the growth of Medicare spending, based on the program's spending through June. Medicare is now expected to grow by $169 billion, or 2 [percent], less from 2013–2022,” he wrote.
Edited by
Braden Becker
