Author:Suderman, Peter

IN 1960, SIX years before the start of Medicare and Medicaid, America spent about $27 billion on health care. That figure represented just under 5 percent of an economy that was about $543 billion in total. By 2016, combined public and private spending on health care had reached more than $3.3 trillion, or nearly 18 percent of the total economy, with almost half the bill paid by government. Now, thanks to factors such as increased drug prices and an aging population, official projections have health care spending increasing indefinitely.

In the five decades after the passage of America's two largest health care entitlements, that sector has become a maw, eating everything in its path. Health spending has reshaped the nation's job market, its household finances, and its public budgeting. Between January 2007 and November 2017, nearly a third of all jobs created in the United States were health care jobs. On average, American households spend 22 percent of their income on health care, up from 10 percent in the '70s. Large employers spend an average of more than $14,000 per employee on health insurance and the like each year. Medicaid, which is jointly administered and financed by state and federal governments, is one of the largest line items in every state budget. Health care entitlements are the biggest drivers of the long-term federal debt and a fixture of America's most consequential public policy debates.

Medicare and Medicaid were themselves outgrowths of the failed single-payer campaigns of the 1940s and 1950s. Nearly every decade since they came into being has been marked by battles over health care policy and politics. In the 1970s, Sen. Ted Kennedy proposed a single-payer plan that was scuttled after the newly created Congressional Budget Office estimated it would cost far more than Kennedy's staff had said. In the 1980s, Ronald Reagan presided over a series of changes to Medicare's payment system in an effort to tamp down on costs. In the 1990s, one of Bill Clinton's first major initiatives was a failed attempt to pass a disruptive universal coverage law. A decade later, George W. Bush would oversee the passage of Medicare's prescription drug benefit, his administration's most visible and priciest domestic policy achievement.

Barack Obama's presidency was defined in large part by the effort to pass and implement the Affordable Care Act, the health care law that would become known as Obamacare. Even with Democratic majorities in...

To continue reading