Medicare's Bending Cost Curve. July 28, 2014. II. Quantifying the Impact of the Slowdown in Medicare Spending Growth

07/28/2014

Figure 2 displays per enrollee spending for beneficiaries in the traditional Medicare program. The figure includes spending on Part A and B services, as well as on prescription drugs (Part D) in 2009, 2010, 2011, and 2012 (the latest year of data available from the Master Beneficiary Summary File). The figure also displays an illustrative trend line showing what spending would have been if the growth rate during these years had been equal to the average growth rate of per enrollee spending for 2000-2008. Growth attributable to Part D spending was excluded for 2006 because spending growth for the years 2000-2008 would have appeared artificially high due to introduction of the Part D program. The difference between the trend lines implies a substantial reduction in accumulated spending of $116.4 billion relative to what spending would have been if the average growth rate for 2000-2008 had continued through 2012.

Figure 2

Actual vs. Illustrative Growth in Personal Health Expenditures for the Traditional Medicare Program Using 2000-2008 Average Expenditure Growth
(in billions)

Figure 2: Actual vs. Illustrative Growth in Personal Health Expenditures for the Traditional Medicare Program Using 2000-2008 Average Expenditure Growth (in billions)

Data Source: CMS Medicare Beneficiary Summary File

Notes: Projections include spending on Medicare Parts A, B, and D for traditional Medicare beneficiaries.

Growth rate for 2006, used to generated 2000-2008 projection only includes Parts A and B to avoid artificially high growth rate from introduction of the Part D program.

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