Without any expansion of federal health benefits, the cost of Medicare and Medicaid is sinking the budget, according to this Congressional Budget Office release:

Under current law, the federal budget is on an unsustainable path, because federal debt will continue to grow much faster than the economy over the long run. Although great uncertainty surrounds long-term fiscal projections, rising costs for health care and the aging of the population will cause federal spending to increase rapidly under any plausible scenario for current law. Unless revenues increase just as rapidly, the rise in spending will produce growing budget deficits. Large budget deficits would reduce national saving, leading to more borrowing from abroad and less domestic investment, which in turn would depress economic growth in the United States. Over time, accumulating debt would cause substantial harm to the economy….

CBO projects that if current laws do not change, federal spending on Medicare and Medicaid combined will grow from roughly 5 percent of GDP today to almost 10 percent by 2035. By 2080, the government would be spending almost as much, as a share of the economy, on just its two major health care programs as it has spent on all of its programs and services in recent years.

The answer to this problem is to move people into the private insurance sector whenever possible through market mechanisms which encourage private competition, and to give consumers the ability to shop for health services based on price and other factors, as they would any other service or product. That would be positive change and real reform. Only through private competition can health costs be brought down without severe rationing of health services by government.

Instead of pursuing market-based solutions which empower consumers, Congress and the Obama administration seek to move more people onto public programs based on models similar to the current unsustainable model. The congressional proposals under consideration do nothing to empower consumers or to limit costs other than through government fiat. History shows, however, that the government option is no option at all.

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