Medicare spending growth slows

Apr 01, 2012

Slower growth in Medicare spending is likely a result of more spending constraints rather than the recession.

NATIONAL REPORTS- Slower growth in Medicare spending is likely a result of more spending constraints rather than the recession.

"The elderly were not impacted in the same way as the non-elderly by the recession," says Chapin White, a Center for Studying Health System Change (HSC) senior health researcher. "Obviously, there wasn't the same loss of employment. Their incomes continued to increase in real terms."

But slower growth in Medicare spending is a trend, he says. The Congressional Budget Office (CBO) in January made a $69 billion downward revision to its 10-year Medicare spending projection.

"The effect of PPACA grows over time, because it basically said the increase in Medicare payment rates from 2011 to 2012 is going to be one percentage point lower than it would have been, and the same going from 2012 to 2013," White says. "So there's a bigger and bigger wedge that happens over time."

The recession may also be behind the increasing Medicare Advantage enrollment. January and February enrollment numbers released by the Centers for Medicare and Medicaid Services (CMS), show membership increased by 693,000 lives. As of February 1, total Medicare Advantage membership was more than 13 million lives, according to CMS data.

Seniors are looking for value in their health plans, according to Mary Kennedy, vice president, Medicare Programs at the Association for Community Affiliated Plans. Certain benefits, such as hearing aids for example, might be covered under Medicare Advantage Special Needs Plans.

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