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How Health Care Can Save or Sink America

The Case for Reform and Fiscal Sustainability

U.S. President Barack Obama arrives to deliver a statement about the Supreme Court ruling to uphold the nationwide availability of tax subsidies that are crucial to the implementation of the Affordable Care Act, in the Rose Garden at the White House in Washington June 25, 2015. Jonathan Ernst / Reuters

Rising health-care costs are at the core of the United States' long-term fiscal imbalance. The Congressional Budget Office (CBO) projects that between now and 2050, Medicare, Medicaid, and other federal spending on health care will rise from 5.5 percent of GDP to more than 12 percent. (Social Security costs, by comparison, are projected to increase from five percent of GDP to six percent over the same period.) It is no exaggeration to say that the United States' standing in the world depends on its success in constraining this health-care cost explosion; unless it does, the country will eventually face a severe fiscal crisis or a crippling inability to invest in other areas.

The problem is not limited to the federal government. Over the past 25 years, cost increases in the national Medicare and Medicaid programs have roughly paralleled (and actually been slightly below) cost increases in the rest of the health-care system. These trends

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