Not Such A Budget Buster

It looks like the predictions of impending doom and economic disaster for Medicare were blown all out of proportion.

The changes are big. The difference between the current estimate for Medicare’s 2019 budget and the estimate for the 2019 budget four years ago is about $95 billion. That sum is greater than the government is expected to spend that year on unemployment insurance, welfare and Amtrak — combined. It’s equal to about one-fifth of the expected Pentagon budget in 2019. Widely discussed policy changes, like raising the estate tax, would generate just a tiny fraction of the budget savings relative to the recent changes in Medicare’s spending estimates.

Check out the graph they provide. Pretty cool.

So, why did this happen?

Even as more people are getting access to health insurance, the costs of caring for individual patients is growing at a super-slow rate. That means that health care, which has eaten into salary gains for years and driven up debt and bankruptcies, may be starting to stabilize as a share of national spending.

Also...

..some are because of cuts in health care spending passed by Congress. The Affordable Care Act, in particular, made significant reductions to Medicare’s spending on hospitals and private Medicare plans, to help subsidize insurance coverage for low- and middle-income Americans. The Budget Control Act, which Congress passed in 2011, also made some across-the-board cuts to Medicare spending.

Further...

...much of the recent reductions come from changes in behavior among doctors, nurses, hospitals and patients. Medicare beneficiaries are using fewer high-cost health care services than in the past — taking fewer brand-name drugs, for example, or spending less time in the hospital. The C.B.O.'s economists call these changes “technical changes,” and they dominate the downward revisions since 2010.

Well, there goes that talking point:)