Medicare spending growth hits historic lows

By BenefitsPro


By Kathryn Mayer

The Department of Health and Human Services touted health reform Thursday, saying it’s caused Medicare’s costs to rise at historically low rates, while preserving important benefits to seniors.

Medicare spending per beneficiary grew just 0.4 percent in 2012, continuing a pattern of very low growth in 2010 and 2011, a new report from HHS says.

Both the Medicare actuaries and the Congressional Budget Office have also projected that low cost increases will continue for several years, citing the Patient Protection and Affordable Care Act as the main reason.

At the same time, they say, Medicare beneficiaries have gained access to additional benefits, such as increased coverage of preventive services and lower cost-sharing for prescription drugs.

Another factor contributing to slowing growth trends for Medicare is demographics, researchers say. As the baby boomers become eligible for Medicare benefits, the average age of Medicare beneficiaries will decline somewhat over the coming decade. The changing age structure of Medicare beneficiaries will cause expenditures per beneficiary to grow by approximately 0.2 percent per year more slowly over the next decade then they would if the age structure were constant.

Originally published on BenefitsPro.com