In 2010 the Center for Budget Policies and Priorities published their Medicare spending forecast. Now, three years later, the CBPP is forecasting a $511 billion reduction.
The half a trillion dollar reduction in spending is said to be due to a dramatic slowdown in health care costs. For three years straight health care costs have been in line with the rest of the economy. In previous years, healthcare was outpacing most of the fastest growing industries.
“In recent years, health care spending has grown more slowly both nationally and for federal programs than historical rates would have indicated,” the CBO wrote in its latest forecast. The CBO also noted that, last year, “federal spending for Medicare and Medicaid was about 5 percent below the amount that CBO projected in March 2010.”
Due to the new trend, “CBO made a series of downward technical adjustments to its projections of spending for Medicare and Medicaid.”
Have Medicare costs truly been reeled in, or is this simply a reflection of the down economy? Read more about this story in this great piece on by Annie Lowrey of the New York Times.