On the future fiscal burden of health care in the United States

The government of president Obama has pointed out that in the long run health care cost associated to Medicare and Medicaid will be an unbearable burden for the Unites States public finances. While everybody agrees with this concern, there are disagreements on what is causing increasing health care cost: the increase of medical care prices or the aging of the population. The government believes that it is the former, but in this note the author highlights the importance of the aging of the population as the main cause of health care cost, in the long but also in the short run. Our projection of United States health care expenditure shown in a previous note supports the idea that controlling for prices, the aging of the population will imply a huge increase in health care expenditure.