Federal spending is going up this year, mostly due to increases in health spending, according to recently released projections by the Congressional Budget Office.
The nonpartisan agency projects that mandatory federal outlays will rise by $168 billion in 2016 –– or 6 percent –– and that $104 billion of that will come from increased spending on Medicare, Medicaid, the Children’s Health Insurance Program and subsidies to those purchasing insurance on the Obamacare exchanges. That amounts to an 11 percent increase in federal health spending over the previous year.
The CBO is quick to mention, however, that part of the projected increase is due to a shifting of certain Medicare payments from 2017 to 2016. If not for that, health care spending will only rise by $80 billion, or 8.6 percent.
Specifically, Medicaid spending will rise by $31 billion –– also 8.8 percent. Obamacare subsidies will increase $18 billion, or by nearly 50 percent.
Spending on Medicare, which is not significantly impacted by the Patient Protection and Affordable Care Act, will rise by $28 billion, or 5.2 percent.
That actually means that growth in federal health spending is slowing down. In 2015, the feds increased their health-related expenditures by 13 percent, or $108 billion. Much of that came from a 16 percent increase in Medicaid spending and a more than 100 percent increase in spending on subsidies for the Obamacare exchanges.
In comparison, spending on Social Security will rise $28 billion, or only 3 percent in 2016.
Mandatory outlays refers to spending that is required due to existing law and take place without regular authorization from Congress. It is distinguished from “discretionary spending,” which generally refers to a funds specifically appropriated by Congress, typically for shorter-term programs.
Big increases in federal health spending are nothing new. The rising cost of health care has ensured that federal programs tied to the industry steadily grow.
But the Patient Protection and Affordable Care Act introduced even more spending by expanding eligibility of Medicaid in 31 states (so far), and offering subsidies to individuals to buy insurance through federal and state marketplaces.
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