ECONOMIC REPORT OF THE PRESIDENT

form of lower premium costs and indirectly in the form of higher wages. Far
from offsetting the slowdown in premium growth, growth in out-of-pocket
costs has slowed as well, and accounting for out-of-pocket costs increases
these savings to $4,400 in 2016.
People who get coverage outside the workplace have also realized
important savings on premiums and cost sharing. The typical Medicare
beneficiary enrolled in traditional Medicare will incur around $700 less in
premiums and cost sharing in 2016 than if Medicare spending trends had
matched what was projected in 2009 under the policies then in place. This
figure does not include reductions in cost sharing on prescription drugs due
to the combination of the ACA’s provision closing the Medicare Part D coverage
gap and slower-than-expected growth in prescription drug spending,
so it actually understates the total savings to Medicare beneficiaries.
Because State and Federal governments finance a substantial share
of health care spending, slower growth in health care costs has also greatly
improved the fiscal outlook. Due in large part to the ACA’s provisions slowing
the growth of health care costs, CBO projects that the law will reduce
deficits by increasing amounts in the years ahead, rising to an average of 1
percent of GDP over the decade starting in 2026. Over the next two decades
as a whole, the law is projected to reduce deficits by more than $3 trillion. In
addition, since just after the ACA became law, CBO has reduced its projections
of Medicare spending under current policies by an additional $125
billion in 2020 or around 0.6 percent of GDP in that year, further improving
the fiscal outlook. The combination of the ACA and broader trends in the
health care sector have also added 11 years to the life of the Medicare Trust
Fund relative to 2009 projections.
The remainder of this chapter provides additional detail on the challenges
the United States health care system faced when the President took
office, the actions this Administration has taken to meet those challenges,
and the progress that has been achieved to date. The first section of this
chapter focuses on progress in expanding and improving health insurance
coverage, and the second focuses on improvements in the health care delivery
system. The final section concludes.
Expanding and Improving Health
Insurance Coverage
Prior to the Obama Administration, the United States last made substantial
progress in expanding health insurance coverage in the years after
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