Hands hover on the sides of a crystal ball. Text reads "What do you know about the year 2054?"
Category: ACA and Policy, Cost of Healthcare

What Do You Know About the Year 2054?

Among the older relatives I grew up with, including my parents and their siblings, a common saying they used has resonated with me over the years. And even now, as a person charged with forecasting our entire Blue Cross and Blue Shield of Louisiana membership numbers one, three or even five years into the future, this saying rings true:

“Don’t borrow trouble.”

When they said that to me as a youth what they meant was essentially a paraphrase of Scripture: “Don’t worry about tomorrow, as today has enough trouble of its own.”

Acting in the Present by Trying to Predict the Future

In many ways, folks often want us to believe them when they tell us what’s going to happen 10 years, 20 years or even 30 years down the road. Of course, as a person who has been involved in building multi-variate (that means LOTS of variables and research built-in) models for over 30 years, I can tell you in my experience any forecast out more than about three years is essentially a guess. After three years, error rates increase exponentially. It takes a lot of hubris to be an honest forecaster, and I’ve been humbled a lot.

A great example from history is the original passage of Medicare and Medicaid in 1965. When Congress amended the Social Security Act to create these two very important programs, they did a 50-year forecast of the cost to the U.S. government. They included a lot of variables and assumptions in their forecasting models and predicted by 2016, those programs would cost an astounding $85 billion (adjusted for inflation) dollars!

Little did those original forecasters realize that Congress would use the new authority given to them in these amendments to the Social Security Act to continuously add programs and coverages over time. Little did they realize that Americans would have significant gains in life expectancy between 1965 and 2016. At no point did they ever consider that the federal government would create an eligibility category within Medicaid that would cover able-bodied adults up to 138% of an (inflation-adjusted) poverty line.

The actual 2016 spend for Medicare and Medicaid was $1.15 TRILLION dollars. Even taking inflation into consideration, that’s a 1,300% miss. And believe me, for a projection that far out, that’s not too bad. But you sure wouldn’t want to hang your hat on any estimate looking that far into the future. Too many things can change, especially if humans are in the mix.

The Congressional Crystal Ball

Today, we are seeing this sort of history repeat itself in Congress. Well-meaning members trying to “improve” health insurance coverage want to force the Congressional Budget Office (CBO) to give them 30-YEAR SCORES (that’s 30 years from now, predicting what things will be like in 2054!). They will use these scores to propose new coverages they want to add to your health insurance, specifically things they are calling “wellness.”

They contend that while these things may have a very high cost in the first four or five years they are in place, and even at 10 years out aren’t really showing any savings, if we just extend that model out to 30 years, the savings would pour in!

Except that’s not how it really happens in the real world.

You should know these members of Congress want coverage of GLP-1 drugs added to these programs as “wellness.” At the current U.S. pricing, which, as I’ve shared before, is already 300-500% MORE than what they cost in every other developed nation.

Did you know the 10-year projection for the Affordable Care Act (from 2013 to 2022) said that HealthCare.gov would serve 30 million people today, at roughly 60% of the cost in tax credits that were actually spent in 2023? The reality is it will serve perhaps 21 million people for 40% MORE than the projections. It also projected the program would be revenue-neutral by 2022. In reality, it’s driving over $100 billion a year in new borrowing in 2023-24.

Every single day, you are being bombarded with requests and demands that you pay for things or get behind some kind of political action because “30 years from now, you’ll be glad you did!” Some things ARE worth it, sure – like putting money in a retirement account. But even you can’t forecast exactly what expenses that money you save today will pay for in 30 years.

The Straight Talk is, I don’t see a lot of people being right on anything even 10 years down the road. These Congressmen who want to force 30-year cost projections looking for “savings” while forcing you to spend billions more for your health insurance are serving some very narrow constituencies, and that’s not you.

Let’s not borrow trouble.

Posted on: April 4, 2024

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