Dive Brief:
- Medicare is on track to spend about $2 trillion less over the next 10 years compared to previous projections from 2009, according to a new analysis from the Center for American Progress.
- The findings, based on spending projections from the Congressional Budget Office, indicate the savings will increase over the years alongside slowed Medicare cost growth.
- This slowdown in Medicare spending will fulfill one of the major goals of the Affordable Care Act, the researchers suggested, noting the ACA was signed into law in 2010 after the CBO pegged rising Medicare costs as one of the biggest drivers of growing, long-term national debt.
Dive Insight:
The bending of the cost curve indicates the ACA is working, the CAP analysis suggested, calling it a "very promising development” despite the uncertainty of whether it will continue.
“Medicare spending projections have dramatically improved over the course of the Obama administration," stated CAP Director of Fiscal Policy Harry Stein. "If healthcare costs continue to grow very slowly, we should expect the CBO to continue lowering its long-term projections for both Medicare spending and the overall national debt.”
The analysis outlined a number of potential contributing factors for the reduced Medicare cost projections. These included payment reform, penalties for hospital readmissions, and improvements in primary care.
CAP's earlier analysis of just 2016 showed projected spending down $107 billion from January 2009's estimate. That means total federal health program spending for 2016 will be less than what was projected when President Obama took office despite that earlier estimate not having factored in the upcoming impact of coverage expansion under the ACA.