Reform Law Helped Slow Growth in Medicare Spending, HHS Finds
Per capita spending in Medicare grew by just 0.4% in fiscal year 2012, even though beneficiaries are receiving more benefits, according to an HHS report released Thursday, The Hill's "Healthwatch" reports (Baker, "Healthwatch," The Hill, 1/10).
The report notes that 2012 marks the third consecutive year of low per capita spending growth, following increases of 3.6% in fiscal year 2011 and 1.8% in fiscal year 2010. Slow per capita growth coupled with estimates that Medicare spending will grow no faster than the GDP "is unprecedented in the history" of the program, according to the report (Reichard, CQ HealthBeat, 1/10).
The small increases are expected to continue for several years, according to estimates by the Congressional Budget Office and Medicare actuaries ("Healthwatch," The Hill, 1/10).
Report Attributes Low Growth to ACA
The report attributes the low growth in per capita spending to provisions in the Affordable Care Act.
Former CMS Administrator Tom Scully said providers are driving down expenses in response to the ACA's stricter reimbursement policy for Medicare's private health plans, whose members account for 25% of the program. Scully said the recession also likely led people with the Medicare fee-for-service program to not obtain supplemental Medigap coverage (CQ HealthBeat, 1/10).
Critics Point to Overall Spending
However, critics noted that the report did not include data on overall Medicare spending, which they say is more relevant than per capita spending.
Study authors Richard Kronick and Rosa Po, with the HHS Office of the Assistant Secretary for Planning and Evaluation, noted that per capita spending is estimated to grow "at or below the rate of GDP per capita [and that] the number of Medicare beneficiaries is projected to increase by approximately 3% annually." They added, "As a result, aggregate Medicare spending will account for a growing share of GDP over the next decade."Joseph Antos, with the American Enterprise Institute, also noted that while a younger Medicare population might help to keep costs down in the next 10 years, "the demographics start to work against us" when those individuals age (CQ HealthBeat, 1/10). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.