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Life Health > Health Insurance > Health Insurance

CBO: To Cut the Deficit, Cut Health Costs

By Allison Bell

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Reducing health care costs could play a major role in reducing defense costs as well as overall federal expenditures.

Budget analysts at the Congressional Budget Office (CBO) discuss ways to control the federal budget deficit by reducing health care costs and other benefits costs in a wide-ranging report on deficit-cutting options.

The analysts also list many ideas for increasing federal revenue.

“The inclusion or exclusion of a particular policy change does not represent an endorsement or rejection by CBO,” CBO Director Douglas Elmendorf says in a preface to the report. “In keeping Douglas Elmendorf with the CBO’s mandate to provide objective, impartial analysis, this report makes no recommendations.”

The exclusions for employers’ contributions for health care, health insurance and long term care insurance, and the net exclusion for pension contributions and earnings, will cost the federal government a total of about $1.3 trillion in lost revenue from federal fiscal year 2010 to fiscal year 2014, analysts note in a table, citing figures from the congressional Joint Committee on Taxation.

Large sections of the report cover options for reducing federal health care outlays.

Under health, for example, CBO analysts list options such as “add a public plan to the health insurance exchanges” required by the Patient Protection and Affordable Care Act, and the analysts estimate that change could reduce the federal budget deficit by $88 billion from fiscal year 2012 to fiscal year 2021.

The analysts also list possibilities such as limiting medical malpractice suits, slowing the growth of contributions to the Federal Employees’ Health Benefits Program, using fees to finance the Food Safety and Inspection Service, and reducing spending on the National Institutes of Health.

Congress also could change the rules for computing Social Security cost-of-living adjustments, raise the eligibility age for Social Security and lengthen the computation period for Social Security benefits, officials say.

The analysts also include many health-related ideas in the veterans and defense sections of the report.

Options include ending enrollment in Veterans Affairs medical care for veterans in priority groups and introducing minimum out-of-pocket payment requirements for enrollees in Tricare, a federal program that serves military personnel, retirees and dependents who get care away from military and Veterans Affairs facilities.

More federal budget deficit coverage from National Underwriter Life & Health:

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