1he n|story of Iedera|

nea|th Care Spend|ng

! #$%&'()*$+ $, -().)+'/ '+0
#1((2+3 4($.('% -13/'5*

U.S. Senator 1om Coburn, M.D. | Iebruary 2014
! # !

Introduct|on
lederal spendlng on healLh care conLlnues Lo be Lhe largesL drlver of Lhe naLlonal debL, and healLh spendlng consumes a
larger porLlon of Lhe federal budgeL each year. MosL economlsLs and budgeL experLs agree: Lo geL a handle on our debL
and deflclL, we musL slow Lhe growLh of healLh spendlng. unforLunaLely, lnsLead of addresslng Lhe lssue, Lhe federal
governmenL conLlnues Lo creaLe new healLh care programs and expand exlsLlng ones.

nearly four years ago, resldenL Cbama slgned lnLo law Lhe largesL healLh reform overhaul ln hlsLory, Lhe aLlenL
roLecLlon and Affordable Care AcL (ACA, or Obamacare). The laws supporters have suggested it will reduce the
deflclL, lower cosLs, and decrease healLh spendlng ln Lhe long-Lerm.

So far, Lhe ACA has yeL Lo dellver on many of Lhe asplraLlons and promlses LhaL were lnvoked Lo secure Lhe laws
passage. non-parLlsan experLs conflrm Lhe law ls lncreaslng boLh healLh cosLs and federal healLh care spendlng. ln facL,
daLa shows Lhe law wlll lncrease spendlng by more Lhan $2 Lrllllon once fully lmplemenLed.
1


Many supporLers of Lhe law say we must move forward with the law and press on to make the law successful. 1hey
argue repeallng Lhe law would mean a reLurn Lo a broken sLaLus quo. CerLalnly, our healLh care sysLem was broken even
before Lhe ACA, buL Cbamacare falled Lo address Lhe underlylng problems. Thats why I worked with my colleagues to
drafL an Cbamacare alLernaLlve ln 2009 and recenLly lnLroduced anoLher alLernaLlve wlLh SenaLors 8urr and PaLch.

8egardless of wheLher pollcymakers wanL Lo see Lhe ACA lmproved or replaced, boLh sldes can beneflL from learnlng
abouL Lhe healLh pollcy experlmenLs of Lhe pasL. 1hey reveal Lwo valuable lessons:

First, the federal governments spending on health care programs usually ouLpaces economlc growLh.
*
1hls facL
presenLs a slgnlflcanL challenge Lo pollcy-makersas Lhe growLh ln Lhese programs crowds ouL oLher budgeLary
prlorlLles. lL also presenLs an lncreaslng LhreaL Lo Laxpayers and consumers, who wlll, as a resulL, elLher face hlgher Lax
burdens, larger debL, or reduced focus on oLher lmporLanL federal prlorlLles.

Second, compared wlLh lnlLlal governmenL esLlmaLes and ouLlays, mosL programs have experlenced exponenLlal growLh
ln real Lerms when compared Lo lnlLlal esLlmaLes. CerLalnly, a varleLy of modlflcaLlons Lo ellglblllLy and beneflLs have
been made ln Lhese programs by Congress slnce Lhelr lncepLlon. And lL ls also Lrue over Lhe longer-Lerm, demographlc
and markeL changes (llke lnnovaLlons ln medlcal Lechnology and longer llfe-expecLancy) have slgnlflcanLly lmpacLed Lhe
growLh ln spendlng wlLhln Lhese programs. 8uL Lhe hlsLorlcal Lrend ls clear: federal spendlng on healLh care programs
wlll lncrease vasLly and ouLpace economlc growLh. Moreover, Lhe orlglnal esLlmaLes of program ouLlays are relaLlvely
poor lndlcaLors of acLual spendlng over a longer perlod of Llme.

8ased on a revlew of Lhe facLs, readers have solld ground for concludlng Lhe federal governmenL has a poor Lrack record
of consLralnlng healLh care spendlng over Llme. Accordlngly, ln llghL of Lhe reallLy of pasL Lrends, concern abouL Lhe
Lra[ecLory of Lhe fuLure healLh care spendlng wheLher ln Lhe ACA, Medlcare, Medlcald, or oLher programsls well
placed.





*
Lconomlc growLh (ln Lerms of Cross uomesLlc roducL) from 1963 Lo 2013 was abouL 322 (lnflaLlon ad[usLed). Source: 8ureau of
Economic Analysis, Current-dollar and real GDP, last updated January 30, 2014. hLLp://www.bea.gov/naLlonal/lndex.hLm#gdp.
! $ !

Methodo|ogy
1hls reporL revlews federal healLh care programs and compares Lhe lnlLlal spendlng of each program Lo recenL ouLlays.

1he reporL uses Lhe daLa provlded by Lhe Cfflce of ManagemenL and 8udgeL (CM8) and the Presidents l?2014 8udgeL
Lo compare lnlLlal ouLlays wlLh ouLlays ln 2012. OMB indicates to the extent feasible, the data have been adjusted to
provlde conslsLency wlLh Lhe 2014 Budget and to provide comparability over time.
2


1he reporL also noLes esLlmaLes, approprlaLlons, and ouLlays (as avallable) for lnlLlal program spendlng. lnlLlal esLlmaLes
or orlglnal expendlLures for each program are underllned LhroughouL Lhe reporL. 1hese esLlmaLes vary ln Lhelr quallLy
and speclflclLy, buL all are Lhe earllesL esLlmaLes avallable from offlclal governmenL sources whlch were obLalned by Lhe
Congresslonal 8esearch Servlce (C8S). 1he orlglnal cosL esLlmaLes underllned LhroughouL Lhe reporL have noL been
ad[usLed Lo reflecL general lnflaLlon.

1he reporL also conLrasLs Lhe LoLal number of people enrolled ln each program (as avallable) aL lncepLlon and ln recenL
years. 1he reporL acknowledges an lncrease ln Lhe number of people enrolled ln each program ls aLLrlbuLable Lo a
comblnaLlon of general populaLlon lncreases, leglslaLlve and regulaLory expanslon of Lhe program, and oLher
demographlc and economlc facLors. Powever, Lhe general Lrend ls unmlsLakable: ln each case, Lhe populaLlon served by
Lhe program has greaLly lncreased slnce lLs creaLlon.




! % !

Iedera| nea|th Care rograms
Cverv|ew of Cut|ays and Lnro||ment Increases

rogram Lar|y I|gures kecent I|gures Change
Med|ca|d
$800 mllllon (1966) $230.3 bllllon (2012) + 5249.7 b||||on
31,212.S
|ncrease
! #$%%$&' (')&%%((* +,-../
0
112. #$%%$&' (')&%%((* +34,3/
!
6789: %)//)$+
8;<=>? )+@(2'*2
Med|care
$2.8 bllllon (1967) $471.8 bllllon (2012) 6 AB:= C)//)$+
8:;D7>? )+@(2'*2
56)7 8,92- #$%%$&' (')&%%((* +,-../
1
56)7 8!:2, #$%%$&' (')&%%((* +34,4/
.
6<E9< %)//)$+
8B=9<? )+@(2'*2
56)7 ;,:2. #$%%$&' (')&%%((* +,-../
:
56)7 ;!029 #$%%$&' (')&%%((* +34,4/
9
6<:9< %)//)$+
8BE9=? )+@(2'*2
56)7 <029 #$%%$&' (')&%%((* +344./
-
56)7 <0!21 #$%%$&' (')&%%((* +34,4/
,4
6F>9D %)//)$+
E>D9=? )+@(2'*2
='> ?76@( A('6% <$*(6*( +=?A</,,B444
(')&%%((* +,-:!/
,,

=?A<!10B!!0 (')&%%((* +3449/
,3
6BB<;BBF
B;><<9<? )+@(2'*2
Defense nea|th
rograms
$3.7 bllllon (1980) $33.3 bllllon (2012) 6 AB=9E %)//)$+
8FB79=? )+@(2'*2
920 #$%%$&' (%$@$C%( (')&%%((* $' DAEF8A=
+,--1/
,0

-2: #$%%$&' (%$@$C%( (')&%%((* +34,,/
,!
$'
DAEF8A=
689B %)//)$+
8:9=? )+@(2'*2
Veterans
Med|ca| Care
$1.1 bllllon (1962) $30.6 bllllon (2012) 6 AB=97 C)//)$+
B;7>>? )+@(2'*2
!20 #$%%$&' (')&%%((* +,---/
,1
92. G$%%$&' (')&%%((* +34,,/
,.
6B9F %)//)$+
8>>? )+@(2'*2
Cther Iedera|
nea|th Care
rograms
$1.1 bllllon (1962) $94.3 bllllon (2012) + 593.4 b||||on
8,490.9 |ncrease
E'>$6' H(6%7I ?()J$K( +EH?/ .3.B.99
(')&%%((* +,-::/
,:

EH?,2. #$%%$&' (')&%%((* +34,,/
,9
689F %)//)$+
8779F? )+@(2'*2
State Childrens Health Insurance Program
+?FHE5/020 #$%%$&' (')&%%((* +3444/
,-

?FHE592: #$%%$&' (')&%%((* +34,,/
34
679B %)//)$+
8:F9:? )+@(2'*2



Source for CosLs: President Obamas FY 2014 Budget, Historical Table 16, all cosLs have
been ad[usLed Lo be conslsLenL wlLh Lhe 2014 8udgeL
! & !

Med|ca|d
1he Soclal SecurlLy AmendmenLs of 1963 esLabllshed Lhe Medlcald program. Medlcald grew ouL of and replaced Lwo earller
programs of federal grants to states that provided medical care to welfare recipients. The new program, officially named TiLle xlx:
CranLs Lo Lhe SLaLes for Medlcal AsslsLance rograms, formed a centralized program in which vendor payments meeting the
requlremenLs of Medlcald could be admlnlsLered. SLaLes parLlclpaLlng ln Lhls program were requlred Lo cover lnpaLlenL and
ouLpaLlenL hosplLal servlces, laboraLory and x ray servlces, skllled nursing home services; and physicians services. Services such as
home healLh, cllnlc servlce, prlvaLe duLy nurslng servlce, denLal, physlcal Lherapy and prescrlbed drugs were lefL Lo Lhe sLates
dlscreLlon. ln a March 1963 reporL by Lhe Pouse Ways and Means CommlLLee on Lhe Soclal SecurlLy AmendmenLs of 1963, lL was
estimated Medicaid would cost $238 million in 1966, the programs first fiscal year.
21
A reporL by Lhe SenaLe CommlLLee on llnance
ln !une 1963 came Lo Lhe same concluslon.
22


1oday, Medlcald ls requlred Lo cover lnpaLlenL hosplLal servlce, laboraLory and x-ray servlces, physlclan servlces, pregnancy-relaLed
servlces, nurslng faclllLles servlces, home healLh, and servlces provlded by federally quallfled healLh cenLers Lo Lhose who quallfy.
CuallflcaLlons for Lhe Medlcald depend on caLegorlcal LralLs, such as coverage Lo Lhose wlLh dlsablllLles, as well as flnanclal
requlremenLs.

Medlcald was mosL recenLly expanded by Lhe aLlenL roLecLlon and Affordable Care AcL (ACA). 1he ACA expands ellglblllLy for Lhe
program Lo all lndlvlduals under age 63 wlLh lncome up Lo 133 percenL of Lhe federal poverLy level. 1wenLy-flve sLaLes and Lhe
District of Columbia will expand their Medicaid programs by April 1, 2014. Due to the Supreme Courts decislon LhaL made Lhe
Medlcald expanslon opLlonal for sLaLes, Lhe cosL of expandlng Medlcald remalns unclear.


0.0
30.0
100.0
130.0
200.0
230.0
300.0
Med|ca|d Cut|ays
l
n

b
l
l
l
l
o
n
s

o
f

d
o
l
l
a
r
s

?ear
Source: President Obamas FY 2014 Budget, Historical Table 16
! ' !



0
30
100
130
200
230
300
1966 CosL 2012 CosL
0
10
20
30
40
30
60
1966 LnrollmenL 2012 LnrollmenL
1966 vs. 2012 Cut|ays 1966 vs. 2012 Lnro||ment
l
n

b
l
l
l
l
o
n
s

o
f

d
o
l
l
a
r
s

l
n

m
l
l
l
l
o
n
s


Accord|ng to CM8, Med|ca|d spent 52S0.S
b||||on |n 2012, compared to 5800 m||||on |n
1966. Med|ca|d has grown by 31,212.S |n
46 years.
Accord|ng to the Department of nea|th and
numan Serv|ces (nnS), and Centers for
Med|care and Med|ca|d Serv|ces (CMS),
SS.6 m||||on peop|e were enro||ed |n
Med|ca|d |n 2012, compared to 4 m||||on
peop|e |n 1966. Lnro||ment |ncreased by
1,290 |n 46 years.
$800
mllllon
$230.3
bllllon
4 mllllon
33.6 mllllon
Source: President Obamas FY 2014 Budget, Historical 1able 16
Sources: PPS (endnoLes 3,4)
! ( !

Med|care
Medlcare was esLabllshed wlLh Lhe enacLmenL of Lhe 1963 Soclal SecurlLy AmendmenLs. 1he program was creaLed Lo provlde healLh
lnsurance for Lhe elderly and cerLaln people wlLh dlsablllLles. 1he orlglnal program was comprlsed of Lwo parLs: arL A, Lhe hosplLal
lnsurance program, and arL 8, Lhe supplemenLary medlcal lnsurance program. 1he provlslons of Lhe Soclal SecurlLy AmendmenLs of
1963 granLed almosL all clLlzens over 63 years of age access Lo Medlcare arL A. arL A ls funded by payroll Laxes shared beLween
employees and employers. ln 1963 lL was esLlmaLed LoLal Medlcare arL A cosLs would be $1 bllllon ln 1966, lncludlng beneflLs and
admlnlsLraLlon cosLs.
23
Medlcare arL 8 ls funded by a comblnaLlon of premlums pald by beneflclarles and oLher lederal revenues.
LnrollmenL ln arL 8 ls volunLary, and abouL 93 percenL of senlors are enrolled ln arL 8. Slnce Medlcare arL 8 ls volunLary, Lwo
esLlmaLes were glven for 1966 cosLs. lL was expecLed, aL mosL, Lhe federal governmenL would conLrlbuLe $203 mllllon for Medlcare
arL 8, lncludlng beneflLs and admlnlsLraLlon cosLs ln 1966.
24


1he Lnd SLaLe 8enal ulsease (LS8u) provlslon was lncluded ln Lhe Soclal SecurlLy AmendmenLs of 1972.
23
1he program provldes
Medlcare beneflLs for LS8u paLlenLs, regardless of age, who need dlalysls or a kldney LransplanL. 1he program ls funded by boLh
Medlcare arL A, Lhe hosplLal lnsurance program, and Medlcare arL 8, Lhe supplemenLal medlcal lnsurance program. 1he Medlcare
8oard of 1rusLees' pro[ecLed cosLs would be $98 mllllon ln 1974.
26
ln 1973, coverage for clLlzens wlLh dlsablllLles was added.

1he 8alanced 8udgeL AcL of 1997 creaLed Lhe Medlcare + Cholce program, laLer known as Medlcare AdvanLage, whlch esLabllshed
opLlons for Medlcare beneflclarles Lo uLlllze prlvaLe plans.

Medlcare arL u was creaLed when Congress passed Lhe Medlcare rescrlpLlon urug, lmprovemenL, and ModernlzaLlon AcL of 2003.
1he blll esLabllshed a volunLary prescrlpLlon drug beneflL program LhaL was Lo be admlnlsLered by prlvaLe lnsurance. lL was
esLlmaLed ouLlays for Medlcare arL u would be $32 bllllon ln 2006.
27



0.0
100.0
200.0
300.0
400.0
300.0
600.0
Med|care Spend|ng
Growth |n Med|ca|d Costs
LS8u added
Medlcare AdvanLage creaLed
arL u added
l
n

b
l
l
l
l
o
n
s

o
f

d
o
l
l
a
r
s

?ear
Source: President Obamas FY 2014 Budget, Historical Table 16
! ) !


1967 vs. 2012 Spend|ng
Accord|ng to CM8, Med|care spent 5471.8 b||||on |n 2012 compared to 52.8 b||||on |n 1967. rogram
spend|ng |ncreased by 16,7S0 |n 4S years.


1966 vs. 2010 Med|care art A Lnro||ment
In 2010, there were 47.1 m||||on peop|e enro||ed |n Med|care art A compared to 18.9 m||||on peop|e |n
1966. Lnro||ment |ncreased by 149.2 |n 44 years.


1966 vs. 2010 Med|care art 8 Lnro||ment
In 2010, there were 43.8 m||||on peop|e enro||ed |n Med|care art 8 compared to 17.6 m||||on peop|e |n
1966. Lnro||ment |ncreased by 148.9 |n 44 years.



0 30 100 130 200 230 300 330 400 430 300
1967 CosL
2012 CosL
0 3 10 13 20 23 30 33 40 43 30
1966 LnrollmenL
2010 LnrollmenL
0 3 10 13 20 23 30 33 40 43 30
1966 LnrollmenL
2010 LnrollmenL
ln bllllons of dollars
$2.8 bllllon
ln mllllons
ln mllllons
$471.8
bllllon
18.9 mllllon
47.1 mllllon
17.6 mllllon
43.8
mllllon

Source: President Obamas FY 2014 Budget, Historical Table 16
Sources: SSA, lederal PosplLal lnsurance and lederal SupplemenLary Medlcal lnsurance 1rusL lunds (endnoLes 3,6)
Sources: SSA, lederal PosplLal lnsurance and lederal SupplemenLary Medlcal lnsurance 1rusL lunds (endnoLes 7,8)
! * !

2006 vs. 2010 Med|care art D Lnro||ment
In 2010, there were 34.S m||||on peop|e enro||ed |n Med|care art D compared to 3.8 m||||on peop|e |n 2006.
Lnro||ment |ncreased by 807.9 |n 4 years.


1974 vs. 2008 LSkD Lnro||ment
In 2008, there were 4S3,443 peop|e enro||ed |n LSkD compared to 11,000 peop|e |n 1974. Lnro||ment
|ncreased by 4,022.2 |n 34 years.


0 3 10 13 20 23 30 33 40
2006 LnrollmenL
2010 LnrollmenL
0 30000 100000 130000 200000 230000 300000 330000 400000 430000 300000
1974 LnrollmenL
2008 LnrollmenL
ln mllllons
3.8 mllllon
34.3 mllllon
11,000
433,443
Sources: C8C, lederal PosplLal lnsurance and lederal SupplemenLary Medlcal lnsurance 1rusL lunds (endnoLes 9,10)
Sources: lederal PosplLal lnsurance and lederal SupplemenLary Medlcal lnsurance 1rusL lunds, u.S. 8enal uaLa SysLem (endnoLes 11,12)
! +, !

Department of Defense nea|th rograms
rlor Lo 1994, mlllLary healLh care programs had lncluded lndlvldual programs for speclflc branches of Lhe mlllLary, coverage for
mlllLary reLlrees and dependenLs, and for Lhe provlslon of clvlllan healLh care Lo reLlrees less Lhan 63 years of age, servlce members,
survlvors and Lhelr dependenLs. 18lCA8L was esLabllshed by Lhe 1994 ueparLmenL of uefense approprlaLlons acL. 1he program
esLabllshed a naLlonwlde managed healLh care program for acLlve-duLy unlformed personnel and Lhelr dependenLs, ellglble
members of Lhe 8eserve ComponenL and Lhelr dependenLs, and unlformed servlces reLlrees and Lhelr dependenLs and survlvors.
1he 18lCA8L program provlded a unlform and coheslve beneflL sLrucLure LhaL feaLured a Lhree-opLlon beneflL sLrucLure based ln a
reglon-by-reglon approach Lo Lhe healLh managemenL sysLem. 18lCA8L soughL Lo mlnlmlze cosLs by provldlng lncenLlves lncludlng
gate keeping via annual enrollment stipulatlons, open compeLlLlon for conLracLs, and caplLaLlon budgeLlng. ln 2001, Lhe naLlonal
uefense AuLhorlzaLlon AcL allowed healLh care and pharmacy beneflLs Lo be expanded Lo lnclude Medlcare-enLlLled mlllLary reLlrees,
famlly members, and even former spouses who meL Lhe program requlremenLs. ln 1993, Lhe CovernmenL AccounLablllLy Cfflce
(CAC) esLlmaLed flve-year approprlaLlons for 18lCA8L aL $17 bllllon, an average of $3.4 bllllon per year.
28




0.0
10.0
20.0
30.0
40.0
30.0
60.0
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Defense nea|th rograms Cut|ays
18lCA8L creaLed
l
n

b
l
l
l
l
o
n
s

o
f

d
o
l
l
a
r
s

?ears
Source: President Obamas FY 2014 Budget, Historical Table 16
! ++ !

1980 vs. 2012 Cut|ays
Accord|ng to CM8, defense hea|th programs spent 5S3.S b||||on |n 2012, compared to 53.7 b||||on |n 1980.
1he program has |ncreased by 134S.9 |n 32 years.


199S vs. 2011 1kICAkL Lnro||ment
In 2011 there were 9.7 m||||on enro||ees |n 1kICAkL compared to 8.3 m||||on |n 199S. Lnro||ment |n 1kICAkL
has |ncreased by 16.9 |ncrease |n 16 years.


0 10 20 30 40 30 60
1980 CosL
2012 CosL
7.3 8 8.3 9 9.3 10
1993 LnrollmenL
2011 LnrollmenL
ln bllllons of dollars
ln mllllons
9.7 mllllon
8.3 mllllon
$3.7 bllllon
$33.3 bllllon
Source: President Obamas FY 2014 Budget, Historical Table 16
Sources: CAC, CM8 (endnoLes 13,14)
! +# !

Veterans Med|ca| Care
1he unlLed SLaLes has a long hlsLory of provldlng healLh care Lo veLerans, buL slgnlflcanL sLeps Loward currenL healLh care beneflLs
began wlLh WWl and WWll veLerans.
29
8y Lhe mld-1980s, Lhe ueparLmenL of veLerans Affalrs (vA) had been glven Lhe auLhorlLy Lo
admlnlsLer healLh care, lncludlng hosplLal, nurslng home and domlclllary care for mosL veLerans. ln 1986, Lhe low-lncome
requlremenL was dropped, maklng veLerans wlLh servlce- and non-servlce condlLlons ellglble for LreaLmenL. ln 1996, wlLh Lhe
passage of the Veterans Health Care Eligibility Reform Act, the VA created a category sysLem Lo Lrack enrollmenL of vA healLh
servlces. CurrenLly, Lhe veLerans PealLh AdmlnlsLraLlon seeks Lo cover four healLh areas, provldlng medlcal and rehablllLaLlon
servlces, conducLlng medlcal research, provldlng graduaLe medlcal educaLlon, and admlnlsLerlng emergency managemenL. ln 1996,
the CBO estimated appropriations for veterans medical care to be $16.9 billion in that year.
30


1he vPA now provldes and admlnlsLers lnpaLlenL and ouLpaLlenL care, nurslng homes, and prlmary care Lo veLerans wlLh servlce-
connecLed dlsablllLles or Lo Lhose wlLh low lncomes.






0.0
10.0
20.0
30.0
40.0
30.0
60.0
1
9
6
2
1
9
6
4
1
9
6
6
1
9
6
8
1
9
7
0
1
9
7
2
1
9
7
4
1
9
7
6
1
9
7
8
1
9
8
0
1
9
8
2
1
9
8
4
1
9
8
6
1
9
8
8
1
9
9
0
1
9
9
2
1
9
9
4
1
9
9
6
1
9
9
8
2
0
0
0
2
0
0
2
2
0
0
4
2
0
0
6
2
0
0
8
2
0
1
0
2
0
1
2
Veterans Med|ca| Care Cut|ays
Veterans Health Care Eligibility Reform Act
l
n

b
l
l
l
l
o
n
s

o
f

d
o
l
l
a
r
s

?ear
Source: President Obamas FY 2014 Budget, Historical Table 16
! +$ !

1962 vs. 2012 Cut|ays
Accord|ng to CM8, med|ca| care for veterans cost 5S0.6 b||||on |n 2012, compared to 51.1 b||||on |n 1962.
rogram out|ays |ncreased by 4,S00 |n S0 years.


1999 vs. 2011 Veterans nea|th Adm|n|strat|on Lnro||ment
In 2011, 8.6 million people were enrolled in veterans health care, compared to 4.3 million in 1999.
Lnro||ment |n the program has |ncreased by 100 |n 12 years.


0 10 20 30 40 30 60
1962 CosL
2012 CosL
0 2 4 6 8 10 12
1999 LnrollmenL
2011 LnrollmenL
ln bllllons of dollars
ln mllllons
$1.1 bllllon
$30.6 bllllon
4.3 mllllon
8.6 mllllon
Source: President Obamas FY 2014 Budget, Historical Table 16
Sources: C8C, vA (endnoLes 13, 16)
! +% !

Cther nea|th Care rograms
1he lndlan PealLh Servlce and State Childrens Health Insurance Program are Lwo of Lhe largesL healLh programs LhaL were noL
separately listed in OMBs table of historic health spending.

Ind|an nea|th Serv|ce (InS)
1he 1921 Snyder AcL auLhorlzed Lhe flrsL healLh servlces creaLed speclflcally for naLlve Amerlcans. 1he 1934 1ransfer AcL, moved Lhe
admlnlsLraLlon of lndlan healLh from Lhe 8ureau of lndlan Affalrs Lo Lhe ubllc PealLh Servlce. 1he 1976 lndlan PealLh Care
lmprovemenL AcL auLhorlzed and esLlmaLed many speclflc modern lPS acLlvlLles, lncludlng fundlng for healLh servlces, supporLlng
Lhe renovaLlon and consLrucLlon of healLh and envlronmenLal properLles, exLendlng Medlcald ellglblllLy Lo lPS reclplenLs, and
expandlng servlces belng provlded Lo urban lndlans. 1oday, Lhe lPS admlnlsLers a varleLy of healLh programs, lncludlng emergency,
ambulaLory, lnpaLlenL, denLal, publlc healLh nurslng, and prevenLlve healLh care servlces. lPS also admlnlsLers menLal and
subsLance-abuse care. A 1973 reporL on Lhe lndlan PealLh Care lmprovemenL AcL by Lhe SenaLe CommlLLee on lnLerlor and lnsular
Affalrs esLlmaLed Lhe LoLal cosLs of Lhe program would be $232.2 mllllon ln 1977.
31


State Childrens Health Insurance Program (SCHIP/CHIP)
1he SLaLe Chlldrens PealLh lnsurance rogram was esLabllshed Lhrough Lhe 1997 8alanced 8udgeL AcL under 1lLle xxl of Lhe Soclal
SecurlLy AcL. According to the language in the Balanced Budget Act of 1997, The purpose of this title is to provide funds to States
Lo enable Lhem Lo lnlLlaLe and expand Lhe provlslon of chlld heaLh asslsLance Lo unlnsured, low-lncome chlldren ln an effecLlve and
efficient manner that is coordinated with other sources of health benefits coverage for children.
32
1he program was lnLended Lo
provlde federal maLchlng funds, allowlng sLaLes Lo LargeL low-lncome, unlnsured chlldren for healLh lnsurance. 1he law provlded
LhaL SCPl funds would be used by sLaLes Lo expand healLh lnsurance access for chlldren by acqulrlng healLh coverage, provldlng
necessary healLh care servlces, expandlng Medlcald coverage, or a comblnaLlon of Lhe Lhree. 1he program was exLended Lhrough
the Medicare, Medicaid, and SCHIP Extension Act of 2007 through March 2009. In 2009, the Childrens Health Insurance Program
8eauLhorlzaLlon AcL (CPl8A) provlded $44 bllllon ln fundlng Lhrough l?2013 for Lhe program.
33
Whlle Lhe SCPl was esLabllshed
Lhrough Lhe 8alanced 8udgeL AcL of 1997, Lhe program was noL fully operaLlonal ln all sLaLes unLll 2000, and federal expendlLures for
Lhe program ln LhaL year were $1.9 bllllon.
34


0.0
10.0
20.0
30.0
40.0
30.0
60.0
70.0
80.0
90.0
100.0
1
9
6
2
1
9
6
4
1
9
6
6
1
9
6
8
1
9
7
0
1
9
7
2
1
9
7
4
1
9
7
6
1
9
7
8
1
9
8
0
1
9
8
2
1
9
8
4
1
9
8
6
1
9
8
8
1
9
9
0
1
9
9
2
1
9
9
4
1
9
9
6
1
9
9
8
2
0
0
0
2
0
0
2
2
0
0
4
2
0
0
6
2
0
0
8
2
0
1
0
2
0
1
2
Cther Iedera| nea|th Spend|ng Cut|ays
lndlan PealLh Care lmprovemenL AcL
SCPl creaLed
l
n

b
l
l
l
l
o
n
s

o
f

d
o
l
l
a
r
s

?ear
Source: President Obamas FY 2014 Budget, Historical Table 16
! +& !


1962 vs. 2012 Cther nea|th Care rogram Cut|ays
Accord|ng to CM8, other hea|th care programs out|ays equa|ed cost 594.S b||||on |n 2012, compared to 51.1
b||||on |n 1962. 1he program out|ays |ncreased by 8,490.9 |n S0 years.



19S4 vs. 2011 InS Lnro||ment
In 2011, enro||ment |n InS was 1.6 m||||on compared to 626,688 enro||ees |n 1977. Lnro||ment |ncreased by
1SS.3 |n 34 years.


2000 vs. 2011 SCnI Lnro||ment
In 2011, enro||ment |n SCnI was 8.7 m||||on compared to 3.3 m||||on enro||ees |n 2000. Lnro||ment
|ncreased by 163.6 |n 11 years.

0 10 20 30 40 30 60 70 80 90 100
1962 CosLs
2012 CosLs
0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8
1934 LnrollmenL
2011 LnrollmenL
0 1 2 3 4 3 6 7 8 9 10
2000 LnrollmenL
2011 LnrollmenL
ln mllllons
ln bllllons of dollars
ln mllllons
1.6 mllllon
626,688
$1.1 bllllon
$94.3 bllllon
3.3 mllllon
8.7 mllllon
Source: President Obamas FY 2014 Budget, Historical Table 16
Sources: lPS (endnoLes 17, 18)
Sources: PPS (endnoLes 19, 20)
! +' !

Spend|ng on A|| Iedera| nea|th Care rograms for 1980-2012



















0.0
100.0
200.0
300.0
400.0
300.0
600.0
19801982198419861988199019921994199619982000200220042006200820102012
uefense PealLh rogram
Spendlng
Medlcald
veLerans Medlcal Care
Medlcare
CLher PealLh Care
rograms
C
o
s
L

l
n

b
l
l
l
l
o
n
s

o
f

d
o
l
l
a
r
s

?ear
Source: President Obamas FY 2014 Budget, Historical Table 16
! +( !


Lndnotes

1
Congresslonal 8udgeL Cfflce, !uly 24, 2013, hLLp://www.cbo.gov/slLes/defaulL/flles/cboflles/aLLachmenLs/43471-hr6079.pdf.
2
Historical Tables, Office of Management and Budget, The White House, hLLp://www.whlLehouse.gov/omb/budgeL/PlsLorlcals.
1able 16.1.
3
2012 Actuarial Report on the financial outlook for Medicaid, Department of Health and Human Services,
hLLp://medlcald.gov/Medlcald-CPl-rogram-lnformaLlon/8y-1oplcs/llnanclng-and-8elmbursemenL/uownloads/medlcald-acLuarlal-
reporL-2012.pdf.
4
Fiscal Year 2013 Budget in Brief: Strengthening Health and Opportunity for All Americans, Department of Health and Human
Servlces, hLLp://www.hhs.gov/budgeL/budgeL-brlef-fy2013.pdf#page=71.
3
Soclal SecurlLy AdmlnlsLraLlon, PlsLory of SSA uurlng Lhe !ohnson AdmlnlsLraLlon 1963-1968,
hLLp://www.ssa.gov/hlsLory/ssa/lb[medlcare3.hLml
6
1he 8oards of 1rusLees, lederal PosplLal lnsurance and lederal SupplemenLary Medlcal lnsurance 1rusL lunds, 2011 AnnuAL
8LC81 Cl 1PL 8CA8uS Cl 18uS1LLS Cl 1PL lLuL8AL PCSl1AL lnSu8AnCL Anu lLuL8AL SuLLMLn1A8? MLulCAL
lnSu8AnCL 18uS1 lunuS, May 13, 2011, p. 9 [ul p. 13] pdf
7
Soclal SecurlLy AdmlnlsLraLlon, PlsLory of SSA uurlng Lhe !ohnson AdmlnlsLraLlon 1963-1968,
hLLp://www.ssa.gov/hlsLory/ssa/lb[medlcare3.hLml
8
1he 8oards of 1rusLees, lederal PosplLal lnsurance and lederal SupplemenLary Medlcal lnsurance 1rusL lunds, 2011 AnnuAL
8LC81 Cl 1PL 8CA8uS Cl 18uS1LLS Cl 1PL lLuL8AL PCSl1AL lnSu8AnCL Anu lLuL8AL SuLLMLn1A8? MLulCAL
lnSu8AnCL 18uS1 lunuS, May 13, 2011, p. 9 [ul p. 13] pdf
9
CBO, Letter to the Honorable William Bill M. Thomas, Chairman, Committee on Ways and Means, November 14, 2003; p. 2 [PDF
p. 2] hLLp://www.cbo.gov/slLes/defaulL/flles/cboflles/fLpdocs/48xx/doc4807/11-14-medlcareleLLer.pdf
10
1he 8oards of 1rusLees, lederal PosplLal lnsurance and lederal SupplemenLary Medlcal lnsurance 1rusL lunds, 2011 AnnuAL
8LC81 Cl 1PL 8CA8uS Cl 18uS1LLS Cl 1PL lLuL8AL PCSl1AL lnSu8AnCL Anu lLuL8AL SuLLMLn1A8? MLulCAL
lnSu8AnCL 18uS1 lunuS, May 13, 2011, p. 9 [ul p. 13] pdf
11
8oard of 1rusLees lederal SupplemenLary Medlcal lnsurance 1rusL lund, 1973 Annual 8eporL of Lhe 8oard of 1rusLees of Lhe
lederal SupplemenLary Medlcal lnsurance 1rusL lund, !uly 16, 1973, p. 24 hLLp://www.docsLoc.com/docs/116733881/8oard-of-
1rusLees-lederal-SupplemenLary-Medlcal-lnsurance-1rusL-lund_-1973-Annual-8eporL
12
u.S. 8enal uaLa SysLem, uS8uS 2010 Annual uaLa 8eporL: ALlas of Chronlc kldney ulsease and Lnd-SLage 8enal ulsease ln Lhe
unlLed SLaLes, naLlonal lnsLlLuLes of PealLh, naLlonal lnsLlLuLe of ulabeLes and ulgesLlve and kldney ulseases, 8eLhesda, Mu, 2010, p.
368 [ul p. 2 or 16 20] hLLp://www.usrds.org/2010/pdf/v2_11.pdf
13
CAC, uLlLnSL PLAL1P CA8L lssues and Challenges ConfronLlng MlllLary Medlclne, CAC/PLPS-93-104, March 22, 1993, p. 23 [ul
p. 23]
14
Cfflce of ManagemenL and 8udgeL, llscal ?ear 2013 8uuCL1 of Lhe u.S. CovernmenL, pl. 271 [ul p. 271]
hLLp://www.whlLehouse.gov/slLes/defaulL/flles/omb/budgeL/fy2013/asseLs/mll.pdf
13
C8C, LM7M)( G(>$K6% ?N('>$'@ CO 7I( <(N6)7#('7 &P Q(7()6'* 8PP6$)*, SLaLemenL of Alllson ercy, rlnclpal AnalysL, 1esLlmony
8efore Lhe SubcommlLLee on MlllLary ConsLrucLlon, veLerans Affalrs, and 8elaLed Agencles, CommlLLee on veLerans Affalrs, u.S.
Pouse of 8epresenLaLlves, lebruary 13, 2007, p. 3 [ul p. 3]
16
ueparLmenL of veLerans AffalrsB LR34,0 ;M>@(7 ?MC#$**$&'B G(>$K6% 5)&@)6#* 6'> E'P&)#67$&' D(KI'&%&@O 5)&@)6#*B volume 2
of 4, lebruary 2012 p. 18-3 [ul p. 37] hLLp://www.va.gov/budgeL/docs/summary/ly2013_volume_ll-
Medlcal_rograms_lnformaLlon_1echnology.pdf
17
SelecLed vlLal SLaLlsLlcs for lndlan PealLh Servlce Areas And Servlce unlLs, 1972 Lo 1977, see 1able 1.
18
lndlan PealLh Servlce, user opulaLlon 8eporL (PC Summary) 1hree ?ear, Age Croups and Sex 8y Areas and Servlce unlLs of
8esldence, l? 2011 [Lxcel spreadsheeL]. 8ockvllle, Mu: lndlan PealLh Servlce, Congresslonal and LeglslaLlve Affalrs Cfflce, Llne 1639
hLLp://www.docsLoc.com/docs/116733011/lPS-l?-2011
19
Mathematica Policy Research, Childrens Health Insurance Program: An Evaluation (1997-2010), lnLerlm 8eporL Lo Congress,
uecember 21, 2011, 1able A.9 [ul p. 177] hLLp://aspe.hhs.gov/healLh/reporLs/2012/CPl8A-l81C/lndex.pdf
20
FY 2013 Budget in Brief: Childrens Health Insurance Program, uS ueparLmenL of PealLh and Puman Servlce, p. 71 [ul p. 76]
hLLp://www.hhs.gov/budgeL/budgeL-brlef-fy2013.pdf#page=77
21
1he CovernmenL rlnLlng Cfflce, SCClAL SLCu8l1? AMLnuLMLn1S Cl 1963, 8LC81 Cl 1PL CCMMl11LL Cn WA?S Anu MLAnS
Cn P.8. 6673, March 29, 1963, p. 73 [ul p. 81]
22
1he CovernmenL rlnLlng Cfflce, SCClAL SLCu8l1? AMLnuLMLn1S Cl 1963, 8LC81 Cl 1PL CCMMl11LL Cn llnAnCL un1Lu
S1A1LS SLnA1L 1C ACCCMAn? P.8. 6673, !une 30, 1963, p. 83 [ul p. 2]
23
Congresslonal 8esearch Servlce, PeaLh Care lacL SheeL: Crlglnal Medlcare CosL LsLlmaLes, SepLember 22, 1993, p. 2 [ul p. 2] pdf
24
Congresslonal 8esearch Servlce, PeaLh Care lacL SheeL: Crlglnal Medlcare CosL LsLlmaLes, SepLember 22, 1993, p. 2 [ul p. 2] pdf
! +) !


23
8lagg, ChrlsLopher, Amerlcan !ournal of kldney ulsease, World kldney lorum, 1he Larly PlsLory of ulalysls for Chronlc 8enal lallure
ln Lhe unlLed SLaLes: A vlew lrom SeaLLle, vol 49, no 3, March 2007, p. 492 hLLp://www.docsLoc.com/docs/116733614/8lagg_-
ChrlsLopher--1he-Larly-PlsLory-of-ulalysls-for-Chronlc-8enal-lallure
26
8oard of 1rusLees lederal SupplemenLary Medlcal lnsurance 1rusL lund, 1973 Annual 8eporL of Lhe 8oard of 1rusLees of Lhe
lederal SupplemenLary Medlcal lnsurance 1rusL lund, !uly 16, 1973, p. 24 hLLp://www.docsLoc.com/docs/116733881/8oard-of-
1rusLees-lederal-SupplemenLary-Medlcal-lnsurance-1rusL-lund_-1973-Annual-8eporL
8oard of 1rusLees lederal PosplLal lnsurance 1rusL lund, 1973 Annual 8eporL of Lhe 8oard of 1rusLees of Lhe lederal PosplLal
lnsurance 1rusL lund, !uly 16, 1973, p. 29 [ul p. 11 of 18] hLLp://www.ssa.gov/hlsLory/reporLs/LrusL/1973/1973hos2.pdf
27
CBO, Letter to the Honorable William Bill M. Thomas, Chairman, Committee on Ways and Means, February 9, 2005, p. 3 [PDF p.
3] hLLp://www.cbo.gov/slLes/defaulL/flles/cboflles/fLpdocs/60xx/doc6076/LhomaslLr2-9-03.pdf
28
u.S. Ceneral AccounLlng Cfflce, uLlLnSL PLAL1P CA8L lssues and Challenges ConfronLlng MlllLary Medlclne, CAC/PLPS-93-104,
March 22, 1993, p.9 [ul p. 11] hLLp://archlve.gao.gov/L2pbaL1/133790.pdf
29
1he hlsLory of provldlng veLerans wlLh modern healLh care servlces began ln 1924 when Congress allowed World War l veLerans
access Lo hosplLal care. rlor Lo Lhls servlce, veLerans could only recelve hosplLal care for LreaLmenL of condlLlons servlce-connecLed
and lncurred durlng warLlme. ln 1924, Congress granLed hosplLal access Lo World War l veLerans LhaL had nonservlce-connecLed
allmenLs on a space-avallable basls. 1hese reclplenLs were also requlred Lo slgn an oaLh of poverLy. LaLer ln 1943, Congress allowed
World War ll veLerans wlLh nonservlce-connecLed allmenLs access Lo hosplLal care. CuLpaLlenL hosplLal care was added as a beneflL
for veLerans, however, only Lhose wlLh servlce-connecLed condlLlons could parLlclpaLe. Congress Lhen exLended ouLpaLlenL
LreaLmenL for nonservlce-connecLed condlLlons ln 1960. LllglblllLy requlremenLs were furLher loosened, and by 1973 all low-lncome
veLerans, wlLh boLh servlce- and nonservlce-relaLed condlLlons, were granLed care.
30
WesL Croup, unl1Lu S1A1LS CCuL CCnC8LSSlCnAL Anu AuMlnlS18A1lvL nLWS, 104
Lh
Congress-Second Sesslon 19962 volume
6, !une 1997, p. 3396 [ul p. 6].
31
CovernmenL rlnLlng Cfflce, lnulAn PLAL1P CA8L lM8CvLMLn1 AC1, 8LC81 Cl 1PL CCMMl11LL Cn ln1L8lC8 Anu lnSuLA8
AllAl8S unl1Lu S1A1LS SLnA1L LogeLher wlLh Auul1lCnAL vlLWS 1C ACCCMAn? S. 322, May 13, 1973B p. 148 [ul p. 133]
hLLp://www.lhs.gov/admlnmngrresources/lhcla/documenLs/S8epL94-133-lPClA.pdf#page=133
03
CC, u8LlC LAW 10333, AuC. 3, 1997, p. 302 [ul p. 302] hLLp://www.gpo.gov/fdsys/pkg/LAW-103publ33/pdf/LAW-
103publ33.pdf
33
FY 2013 Budget in Brief: Childrens Health Insurance Program, uS ueparLmenL of PealLh and Puman Servlce, p. 71 [ul p. 76]
hLLp://www.hhs.gov/budgeL/budgeL-brlef-fy2013.pdf#page=77
34
Childrens Health Insurance: SCHIP Enrollment and Expenditure Information, Government Accounting Cfflce, !uly 23, 2001,
hLLp://www.gao.gov/asseLs/100/90787.pdf.