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How Would U.S. Rep. Paul Ryan’s (R-Wis.) Fiscal 2012 Budget Proposal Reduce Federal Health Care Spending and Address Rising Health Care Costs?
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"The Path to Prosperity" would reduce the federal budget deficit and federal health care spending in the future to around 6 percent of gross domestic product (GDP) in 2030 and 2040, and 5 percent in 2050, according to the Congressional Budget Office (CBO). This is because the premium support payments would be fixed contributions, rather than variable payments based on the actual cost of health care services. For the federal government, that reduces both the total payment amount and the uncertainty related to rising health care costs. Ryan’s reform also reduces health care spending to levels that are below the Rivlin-Domenici Plan, because his plan has payments only growing at the rate of the consumer price index, which is lower than the Rivlin-Domenici Plan of GDP plus 1 percent.

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READ MORE ABOUT THIS TOPIC: CBO, 2011, “Long-Term Analysis of a Budget Proposal by Chairman Ryan,” p. 2.
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