Fix Health Care Policy

Health Care Spending Remains Stable, but Not for Long

Health care spending actually didn’t skyrocket in 2011–but just wait.

This week, the Centers for Medicare and Medicaid Services (CMS) Office of the Actuary released the National Health Expenditures report for 2011. The report shows that growth in national health spending remained relatively low in 2011, growing at 3.9 percent.

Overall, the U.S. spent $2.7 trillion on health care in 2011, which accounts for 17.9 percent of total gross domestic product (GDP).

There are four major takeaways from the report:

1. A slow economic recovery played a role. The slow growth in health spending correlates with overall slow growth in incomes, jobs, and GDP in 2011. As the report explains, this “raises questions about whether US health care spending will rebound over the next few years as it typically has after past economic downturns.”

Read the rest on The Foundry…

Tags: Centers for Medicare and Medicaid Services, economic downturn, health spending, National Health Expenditures report, ObamaCare, Office of the Actuary, slow growth

Medicare’s Worsening Finances: The Other Shoe Drops

A week ago, the Medicare Trustees issued their annual report, which showed that the program is on the fact track to insolvency. The 2011 analysis projected that the Hospital Insurance Trust Fund (which funds Medicare Part A) will be insolvent in 2024, and the program’s long-term unfunded obligations—promised benefits that are not paid for—amount to $24.6 trillion. Heritage noted the highlights. Page 266 of the official report included a note from Richard Foster, the Medicare Actuary, who said the Trustees’ financial projections “do not represent a reasonable expectation for actual program operations.”

Late Friday afternoon, the Office of the Actuary (OACT) released a separate analysis detailing why the Trustees’ report is unrealistic. While the timing was curious, the reasoning is straightforward. Because the Trustees use assumptions based on current law, OACT warned, “the projections…should not be interpreted as our best expectation of actual Medicare financial operations in the future but rather as illustrations of the very favorable impact of permanently slower growth in health care costs, if such slower growth can be achieved.” (Read the rest on The Foundry…)

Tags: health care costs, Medicare, Medicare Trustees report, ObamaCare, Office of the Actuary