Instead of growing and growing, as it always had, spending per Medicare beneficiary has nearly leveled off over more than a decade.

For decades, runaway Medicare spending was the story of the federal budget.

Now, flat Medicare spending might be a bigger one.

Something strange has been happening in this giant federal program. Instead of growing and growing, as it always had before, spending per Medicare beneficiary has nearly leveled off over more than a decade.

The trend can be a little hard to see because, as baby boomers have aged, the number of people using Medicare has grown. But it has had enormous consequences for federal spending. Budget news often sounds apocalyptic, but the Medicare trend has been unexpectedly good for federal spending, saving taxpayers a huge amount relative to projections.

…

The reason for the per-person slowdown is a bit of a mystery. Scholars have been arguing about it for years, but no one seems sure enough to confidently predict whether it is likely to stick around for much longer.

  • @MicroWaveOPEnglish
    55•1 year ago

    No, this trend started over a decade ago. Here are some possible explanations from the article:

    Some of the reductions are easy to explain. Congress changed Medicare policy. The biggest such shift came with the Affordable Care Act in 2010, which reduced Medicare’s payments to hospitals and to health insurers that offered private Medicare Advantage plans. Congress also cut Medicare payments as part of a budget deal in 2011.

    …

    Older Americans appear to be having fewer heart attacks and strokes, the likely result of effective cholesterol and blood pressure medicines that became cheap and widely used in recent years, according to research from Professor Cutler and colleagues. And drug makers and surgeons haven’t developed as many new blockbuster treatments recently — there has been no new Prozac or angioplasty to drive up spending. (Medicare is currently barred by statute from covering the new class of expensive anti-obesity drugs.)

    Parts of the health system appear to have become more efficient, as medical providers have been more cautious about adopting new therapies without much evidence, and more care has shifted outside hospitals into cheaper settings.

    • @[email protected]English
      1•1 year ago

      Most (all?) insurance plans that charge copays for medications will give heart-related medications for free because of the cost when things like high-blood pressure our not treated.

      This is both great and sad news if true. Great that it’s made a big difference in the quality of later life and sad that it’s largely preventable and yet nothing was done, and that there is still so much to improve with our health care system.