NEJM: Healthcare different post-2010 elections
The 2010 elections transformed U.S. politics, according to a perspective paper published Aug. 31 in the New England Journal of Medicine.
“Emboldened by winning majority control of the House of Representatives and by the election of a new wave of fiscal conservatives, Republicans are resetting the national agenda. The recent agreement between congressional leaders and the Obama administration linking an increase in the government debt ceiling to significant cuts in federal spending underscores the change. The United States is entering a new age of austerity,” continued author Jonathan Oberlander, PhD, from the University of North Carolina, Chapel Hill.
For health policy, this is important as the pervasive belief is that deficit reduction is an economic imperative that alters business-as-usual political norms. “As they search for savings, deficit cutters are likely to focus on health programs, whose size makes them an inviting target,” Oberlander wrote. “Together, Medicare and Medicaid account for 23 percent of all federal spending, and in Washington the long-term deficit problem is seen largely as a healthcare problem.”
One option under discussion would change the formula by which Washington pays states for Medicaid, resulting in lower federal payments, the author stated. As for Medicare, proposals for generating budgetary savings range from increasing premiums for higher-income beneficiaries (such income-related premiums, often confusingly called “means testing,” already exist in Medicare) to raising the eligibility age and increasing cost-sharing for enrollees (for example, by prohibiting privately purchased Medigap plans from providing first-dollar coverage).
“There are also large potential savings to be had by reforming the tax exclusion for employer-paid insurance,” Oberlander stated. “The health insurance exclusion—the largest tax expenditure in the budget—will cost the federal government about $660 billion in forgone revenues between 2010 and 2014.”
There is broad agreement that the U.S. must slow rising healthcare costs. To the extent that deficit concerns enhance the prospects for stronger cost controls, they can be a positive force in health policy. However, the predominance of fiscal issues also distorts health policy by producing “reforms” that are exercises in cost shifting, not cost saving, he stated.
“As healthcare costs rise and the population ages, spending on Medicare and Medicaid will grow substantially,” the author concluded. “The new politics of austerity mean that the healthcare industry and medical providers should anticipate increasingly tough efforts to restrain that growth. Yet the focus on limiting federal healthcare spending and generating budgetary savings ultimately distracts us from tackling the larger issue of restraining system wide—and not just federal—healthcare spending.”
“Emboldened by winning majority control of the House of Representatives and by the election of a new wave of fiscal conservatives, Republicans are resetting the national agenda. The recent agreement between congressional leaders and the Obama administration linking an increase in the government debt ceiling to significant cuts in federal spending underscores the change. The United States is entering a new age of austerity,” continued author Jonathan Oberlander, PhD, from the University of North Carolina, Chapel Hill.
For health policy, this is important as the pervasive belief is that deficit reduction is an economic imperative that alters business-as-usual political norms. “As they search for savings, deficit cutters are likely to focus on health programs, whose size makes them an inviting target,” Oberlander wrote. “Together, Medicare and Medicaid account for 23 percent of all federal spending, and in Washington the long-term deficit problem is seen largely as a healthcare problem.”
One option under discussion would change the formula by which Washington pays states for Medicaid, resulting in lower federal payments, the author stated. As for Medicare, proposals for generating budgetary savings range from increasing premiums for higher-income beneficiaries (such income-related premiums, often confusingly called “means testing,” already exist in Medicare) to raising the eligibility age and increasing cost-sharing for enrollees (for example, by prohibiting privately purchased Medigap plans from providing first-dollar coverage).
“There are also large potential savings to be had by reforming the tax exclusion for employer-paid insurance,” Oberlander stated. “The health insurance exclusion—the largest tax expenditure in the budget—will cost the federal government about $660 billion in forgone revenues between 2010 and 2014.”
There is broad agreement that the U.S. must slow rising healthcare costs. To the extent that deficit concerns enhance the prospects for stronger cost controls, they can be a positive force in health policy. However, the predominance of fiscal issues also distorts health policy by producing “reforms” that are exercises in cost shifting, not cost saving, he stated.
“As healthcare costs rise and the population ages, spending on Medicare and Medicaid will grow substantially,” the author concluded. “The new politics of austerity mean that the healthcare industry and medical providers should anticipate increasingly tough efforts to restrain that growth. Yet the focus on limiting federal healthcare spending and generating budgetary savings ultimately distracts us from tackling the larger issue of restraining system wide—and not just federal—healthcare spending.”