The Department of Health and Human Services administers the huge and fast-growing Medicare and Medicaid programs. These programs fuel rising health costs, distort health markets, and are plagued by waste and fraud. The department also runs many other expensive subsidy programs, including Head Start, TANF, and LIHEAP. Growth in HHS spending is creating a federal financial crisis, and the 2010 health care law sadly makes the situation worse.
The department will spend $872 billion in 2012, or about $7,400 for every U.S. household. It employs 70,000 workers.
Spending Cuts Summary
- Here are proposed reforms to save $81 billion annually in the short-run and prevent federal health costs from consuming a growing share of the economy in the long-run.
Downsize This!
- Medicare Reforms. Medicare should be transformed into a system based on vouchers, individual savings, and competitive insurance markets.
- Medicaid Reforms. Federal spending on low-income health care should be converted to block grants for the states.
- TANF and Welfare Spending. Welfare reforms in 1996 created Temporary Assistance for Needy Families, but this sort of aid should be provided by private charities.
- Head Start and Other Subsidies. HHS funds a vast array of other subsidy programs, many of which are wasteful and ineffective.
- 2010 Health Care Legislation. The law expanded Medicaid, added new taxes and subsidies, created new bureaucracies, and did little to reduce cost growth in health care.
Timeline of Government Growth
- See this timeline for key events in the department’s growth.
Further Reading
- Here are background studies that examine the department’s activities.
Cato Experts
- Michael Cannon, Director, Health Policy Studies
- Michael Tanner, Senior Fellow
- Jagadeesh Gokhale, Senior Fellow
- Chris Edwards, Director, Tax Policy Studies
- Tad DeHaven, Budget Policy Analyst