Surprise: Medicare Spending Far Less Than Expected
Category: Medicare
Sept. 8, 2023 — The number of people using Medicare has grown steadily as baby boomers become eligible. But defying predictions, spending per Medicare recipient has levelled off, which brings unexpected good news for U.S. taxpayers.
Speaking with the New York Times, Harvard professor David Cutler said: “WIthout a doubt, this is the most important thing that has happened to the U.S. budget in the last 20 years”. According to an Upshot analysis, spending was $3.9 trillion less than expected between 2010 and 2020.
Many reasons for it
There is no shortage of possible reasons why Medicare spending is lower than predicted. Some of it comes from reductions in payments to providers from the Affordable Care Act and a 2011 congressional budget deal. Medicare Advantage plans are part of that.
Another big reason is a happy one, Americans are having fewer heart attacks and strokes. Experts say the widespread availability of blood pressure and cholesterol medications have helped with that.
Others say that the healthcare industry and doctors have become more efficient and cost-conscious. Some critics say those efforts might have deprived some patients of the treatment they needed.
Covid-19 deaths might be another reason. Many who died from the disease also suffered from serious medical issues which would have had to be treated.
Bottom line
The leveling off of spending is good news. But Medicare spending is huge – 12% of the 2022 federal spending. As more people become eligible and costly new treatments and drugs are introduced, Medicare spending might increase even more.
Comments? Do you get a sense that Medicare spending is being better managed? Is it too tightly controlled, or too loose? Share your thoughts in the Comments section below.
Comments on "Surprise: Medicare Spending Far Less Than Expected"
Ray Kawano says:
Medicare spending far less _______________? That IS a surprise! With all the fraud and
exaggerated billing by providers going on unchecked(?) I thought spending would be far MORE. The medical industry and doctors have become more efficient and cost
conscius? I know a few who measured up to that, but________.. Hospitals are the worst, in my opinion - claiming 6.5 - 13x what they've settled for. (On the last bill for my late wife they claimed $231k+ and settled for $28k for 4 days in Emergency. $7k/day for a fractured upper arm ? I'd say it helped to pay for their recent expansion. I guess the
strategy is to claim the moon and settle for a satellite.) And ambulance companies?
One company billed Twice for the same one-time service (ride from scene of accident to
KP Emergency- 6 miles). Unfortunately, KP paid them twice. That's Efficiency?
The objectives of Medicare and ACA are great, but something is wrong and needs fixing.
Sally says:
Just a quick question, is the date of this piece correct? Have I missed a whole year somewhere?
Admin says:
Sally, thanks for being alert. No, we cannot go into the future. Have corrected to 2023! Ray, you are right, there is a lot of price gouging in the medical world. Outrageous what some of the claims are. Our health care system needs a lot of improvement, but glad for this bit of good news.
Bill Bamber; Edmonton Alberta says:
I simply "Care" about my Health as know that is simply being responsible & looking myself in the Eye. Also find "Working Out" & not being fanatical about it make's me Smile more!!
Mike says:
I can’t access the article since it is behind a paywall. Is the article saying total Medicare spending was less? According to KFF, a group that studies healthcare issues, spending for traditional Medicare fell for the first time in more than 2 decades but overall Medicare spending was up due to a 6.9% increase to Advantage plans payments. Lower traditional Medicare spending slowed the growth in spending counteracting the increase in Advantage payments.
https://www.kff.org/medicare/issue-brief/traditional-medicare-spending-fell-almost-6-in-2020-as-service-use-declined-early-in-the-covid-19-pandemic/
Stevo says:
I believe part of the problem with healthcare costs lies in paying for people who don't. Just go into any ER. It's packed with people who clearly are not in any distress but go there because they can't be refused and use the ER as their PCP. I'm not sure how that works but the hospital probably pays for some of the costs. Since we don't like taxes we pay in other, often hidden ways.