The U.S. health care system is possibly the most inefficient in the world: We spend twice as much per person on health care as other advanced countries, but we have worse health outcomes, including a lower life expectancy. The government, through programs like Medicare and Medicaid, pays for approximately half of the country's health care, almost all of which is actually provided by the private sector. Thus, the bulk of our projected rising budget deficits are due to skyrocketing private health care costs.
The CEPR Health Care Budget Deficit Calculator shows that if the U.S. can get health care costs under control, our budget deficits will not rise uncontrollably in the future. But if we fail to contain health care costs, then it will be almost impossible to prevent exploding future budget deficits.
The Calculator lets you see what projected U.S. budget debts would be if we had the same per person health care costs as any of the countries listed below, all of which enjoy longer life expectancies than the U.S. (Life expectancies are listed in parentheses.)
The blue line shows projected deficits based on baseline projections from the non-partisan Congressional Budget Office (CBO). This includes the projected impact of cost savings associated with the Affordable Care Act (ACA). The red line shows where the deficits would be if health care costs in the U.S. were to follow a path that does not include the projected cost savings from the ACA. By default, health care costs for other countries is based on the current health care share of gdp. You may also choose to base it on current health-care expenditures per person.
(Best viewed with Mozilla Firefox or Google Chrome.)
This section allows you to modify the baseline budget for the United States by tweaking assumptions for revenues, health care expenditures, and non-health-care expenditures. The lowest point on each slider corresponds to CBO's "Extended Baseline"-- a budget projection based on current law. The highest point on each slider corresponds to the "Alternative Fiscal Scenario". See bottom of the calculator for an explanation.
Baseline refers to the spending and revenue assumptions treated as baseline by the Congressional Budget Office in its 2011 Long-Term Budget Outlook.
The alternative fiscal policy refers to the projections that the Congressional Budget Office constructed in its 2011 Long-Term Budget Outlook based on the assumption that Congress deviates from current law in various ways. The most important differences between the alternative fiscal policy and the baseline are:
There are several other differences in the assumptions in these scenarios, almost all of which have the effect of raising the deficit and debt relative to the baseline scenario. The calculator allows users to pick either the baseline projections, the alternative fiscal scenario projections, or any point between the two for revenue, health care spending, and other spending.
Designed by David Rosnick, Center for Economic and Policy Research.
The previous Health Care Budget Deficit Calculator can be found here.