The rapid growth of per capita health spending in the U.S. is a critical policy problem that needs to be addressed. It is not, however, the primary driver of our federal budget problems over the next 30-40 years. The aging of the population is. Policy changes need to address both pressures to prevent an eventual fiscal meltdown. We must not ignore demographics.
The President and his Budget Director Peter Orszag argue they are being fiscally responsible when they support a massive new health entitlement. But combining Kennedy-Dodd with all of the President's proposed Medicare and Medicaid savings would make America's long-term entitlement spending problem much worse than under current law.