Medicare Growth Rate Decreasing
The rate of growth in Medicare "slowed considerably" in the 1992-2003 time period, compared with the 1975-1983 period, according to a "working paper" released on Monday by the Congressional Budget Office, CongressDaily reports.
According to CongressDaily, the paper represents the views of author Chapin White, a CBO health care analyst, who said the paper is "not subject to CBO's formal review and editing process." For the paper, White compared "excess growth" in Medicare spending per beneficiary from 1975 to 1983 with spending from 1992 to 2003.
The paper defines excess growth as growth above and beyond a combination of general economic expansion and the rate of change in the age composition of beneficiaries, CongressDaily reports. The paper does not take into account more recent developments, such as the prescription drug benefit.
According to the paper, "The rate of so-called 'excess' growth in Medicare spending per beneficiary has varied widely over the least several decades, and growth has slowed substantially in recent years." From 1975 to 1983, excess growth in Medicare averaged 5.5% annually. From 1992 to 2003 -- the last year for which Medicare data was available -- excess growth decreased to 0.9%. The overall excess growth rate from 1975 to 2003 was 2.5%.
"The slowdown is of an economically important magnitude and deserves further study," the paper states.
According to CongressDaily, "The findings could complicate an expected 2007 effort by the White House to restrain the cost of the health insurance program for senior citizens."
President Bush in his 2007 fiscal year budget request proposed a series of measures -- including holding payment rates for certain Medicare services below the rate of inflation, limiting overall Medicare payments to a certain percentage of general revenues and shortening the length of time Medicare would pay for rental of oxygen equipment -- that would cut Medicare growth by $37 billion over five years and $138 billion over 10 years. Democrats have said that "reductions would shred the health care safety net for the elderly," CongressDaily reports (Cohn, CongressDaily, 8/2).