The Causes and Policy Implications of Rising Health Care Spending

The Bush Administration has proposed a number of health care policies that would place greater responsibility for health care decisions on individuals by expanding the use of Health Savings Accounts (HSAs) and high deductible insurance plans. The Administration argues that this approach will encourage consumers to spend their health care dollars more cost-effectively, thereby putting downward pressure on health care costs. Critics of these proposals argue that HSAs and high deductible plans are unlikely to control costs or solve other critical problems, including the lack of insurance coverage for 46 million Americans or the pressure on costs from new technologies.

On Feb. 24, 2006, Dr. Katherine Baicker, a Member of the President’s Council of Economic Advisers, discussed the President’s proposals in the fourth in a series of discussions designed to deepen Brookings’s health policy research and find practical approaches to health care policy issues. Marilyn Moon from the American Institutes of Research and Stuart Butler from The Heritage Foundation, served as commentators. Isabel Sawhill, Vice President and Director of Economic Studies at Brookings, moderated the discussion.

An open question and answer session followed the presentations.