The President's 2007 budget proposal calls for the federal deficit to be cut in half by 2009 and eliminated by 2012. However, his budget does not appear to account for the rise in health care costs nor does it account for the baby boomers retiring starting in 2008. If the federal government doesn't aggressively pursue a contractionary fiscal policy (decrease spending and/or raise taxes) what effect will the increasing burden of health care and baby boomers have on the U.S. economy if the deficits grow?
Healthcare costs are rising especially fast because the U.S health care system is fragmented, with thousands of insurers, hospital groups, physicians groups, benefit administrators, medical equipment providers, drugmakers and health care unions all trying to get the biggest cut of the health care dollar they can. This continuous will lead to an actual decline in after-tax, after-health-care income for most of the U.S population. Most of the insured older adults have healthcare plans that do not provide adequate protection from medical costs. So, out-of-pocket costs for healthcare and healthcare insurance premiums will take a large bite out of the household incomes of older workers. This is ...
Healthcare costs are scrutinized.