Slower Growth in Medicare Spending — Is This the New Normal?

The New England Journal of Medicine: Chapin White, Ph.D., and Paul B. Ginsburg, Ph.D., March 22, 2012.

For many years, policymakers have appropriately singled out federal spending on health care — especially Medicare — as the most serious long-term threat to the nation’s fiscal health. Over the past four decades, the average growth in Medicare spending per enrollee has exceeded the growth in per capita gross domestic product by 2.6 percentage points per year. This trend is unsustainable: if it continued, Medicare would consume all federal revenues by 2060.

But there are indications that Medicare spending growth has slowed. One highly visible gauge of Medicare spending trends is the standard monthly Part B premium, which is set by the Medicare actuary to cover one quarter of total Part B spending. In August 2011, the actuary projected that the Part B premium for 2012 would be $106.60, but the actual premium was set in November at only $99.90. Read More