Last month, the Congressional Budget Office released its annual update to its long-term budget projections, and as I explain in a post on the Health Affairs blog, the unsustainable debt and deficits forecasted by the CBO are due to the familiar causes of growing entitlement spending, especially in health care.

The cause of the soaring deficits and debt is familiar:  rapid increases in entitlement spending (on top of the five decade run-up that has already occurred), driven by the aging of the population, rapidly rising health care costs, and spending associated with expanded health entitlements under the Patient Protection and Affordable Care Act (PPACA).  CBO expects that 54 percent of the federal spending increase on the major entitlements over the next twenty-five years will be attributable to the aging of the U.S. population.

Twenty-eight percent of the increase will be due to “excess cost growth” in health care – meaning cost escalation per capita in excess of GDP growth per capita.  The rest of the spending increase is due to the expansion of Medicaid and the new premium credits enacted in the PPACA.  When looking at just the health care entitlements, 40 percent of the federal spending increase is due to excess cost growth, 35 percent from population aging, and 26 percent from the PPACA program expansions.

You can read the rest of the post here.

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