Obama's Entitlement Delusion

Healthcare growth

Or: it's the seniors, stupid. Andrew Biggs questions the Obama administration's belief that cutting healthcare costs is the key to spending restraint:

[T]here's been some debate over the sources of future entitlement deficits: the traditional view has been that it's the aging population, which pushes more people onto the Social Security, Medicare and Medicaid rolls. A new view says the real culprit is rising per capita health care costs – called "excess cost growth" – which push up spending even if the population doesn't get older. Under the first view, the likely reform approaches are traditional ones like raising taxes, cutting benefits, increasing the retirement age or trying to pre-fund future benefits. Under the new view, only comprehensive health care reform – meaning, reform of private sector health provision in addition to government health plans – can stop rising prices.

[...] What the chart shows is that aging will be the largest driver of entitlement cost growth out through 2040 and likely beyond.

You can judge for yourselves, but it seems to me that given what the chart shows the emphasis of the text could be at least somewhat different.

Over the next 30 years, population aging is our main entitlements problem and it makes sense to seek solutions that are based on the problem we have, not the problem we want to have. Without downplaying healthcare funding issues, which are significant today and will grow even more so in the future, I can't help but think that some on the left have latched onto this new view because it promotes a policy outcome they happen to favor: increased government control over private sector health care provision for working-age people. I suspect that many of these folks would favor more government control even if health care costs weren't rising.