The Mystery of the Missing $1,000 Per Person: Can Medicare’s Spending Slowdown Continue?

KFF: Jul 08, 2014

As Medicare and budget wonks eagerly await the 2014 edition of the Medicare Trustees’ report, the big story in the Medicare world these days is the slowdown in program spending.  Based on our comparison of CBO’s August 2010and April 2014 baselines, Medicare spending this year will be about $1,000 lower per person than was expected in 2010, soon after passage of the Affordable Care Act (ACA), which included reductions in Medicare payments to plans and providers and introduced delivery system reforms that aimed to improve efficiency and reduce costs.  By 2019, Medicare spending per person is projected to be nearly $2,400 lower per person than was expected following passage of the ACA.  Medicare spending projections in CBO’s August 2010 and subsequent baselines take into account the anticipated effects of the ACA, along with other factors that are expected to affect future Medicare spending.  So it seems that the ACA may be having a bigger than expected effect, but something else may be going on here too. Read more