Medicare costs may keep declining, reports say
Innovations adopted and accelerated by the 2010 Affordable Care Act will continue to force down overall Medicare costs, according to industry analysts and studies, even as the economy continues to improve. Those changes include new payment plans, improved efficiency and a move toward consumer-driven insurance plans that started before the law’s passage. They influenced the $618 billion drop in projected Medicare and Medicaid spending over the next decade that was reported May 15 by the Congressional Budget Office. That report showed that costs for the two programs in 2012 were 5 percent less than projected in early 2010, and the CBO data are expected to foreshadow the spending projections in the annual Medicare trustees report scheduled to be released this week. That slowdown could continue, said Michael Chernew, a health care policy professor at Harvard Medical School. Health spending grew about 3 percent a year from 2009 to 2011, Chernew said, a drop from the average 6 percent annual growth the previous decade. Some of that, he said, was because of the economic crisis that started in 2008. But an analysis of health costs for employees of large corporations showed per-employee health spending also decreased.