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Medicare Trustees Report Slower Growth in Medicare Spending

by Published On: May 31, 2013

A slowing rate of growth in Medicare spending has extended the projected solvency of the Medicare Trust Fund for an additional 2 years, to 2026, according to the annual report released by the Medicare Trustees on May 31.

The Centers for Medicare and Medicaid Services (CMS) attributes the positive trend to provisions of the Patient Protection and Affordable Care Act that have held the growth in Medicare spending per beneficiary to below the per-person rate of growth in the nation's economy. 

CMS notes that per-beneficiary Medicare spending grew by 1.7% annually from 2010 to 2012, below the rate of growth in the Consumer Price Index and in the economy as a whole. 

Spending on Medicare Part A in 2012 was lower than projected and spending on Part D Medicare Advantage plans also was below expected levels.

CMS emphasized that slower Medicare spending growth is good news for beneficiaries. Preliminary estimates in the trustees' report indicate that the 2014 Medicare premium likely will not have to increase, although the 2014 premium will officially be determined later this year.

We would argue that the Medicare cost savings shown in the trustees' report make additional across-the-board cuts in reimbursement to long-term services and supports providers unnecessary. 

The report indicates that drastic "redesign" of Medicare is not needed. The trustees noted that more program reforms will be necessary to address Medicare's remaining financing issues, and that the sooner the reforms are made the less draconian they will have to be.

We will continue working with Congress and the Obama administration on responsible Medicare policies that will promote value and delivery system innovation, eliminating incentives for clinically inappropriate services. 


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