The trustees’ report on the financial outlook for Medicare and Social Security is due out in minutes, and I’ll link to my CBPP colleagues’ analysis later in the day.
But for now, check out this press release on the Medicare hospital insurance trust fund:
The Medicare Trustees today projected that the trust fund that finances Medicare’s hospital insurance coverage will remain solvent until 2026, two years beyond what was projected in last year’s report.
“The Medicare Hospital Insurance trust fund is projected to be solvent for longer, which is good news for beneficiaries,” said Marilyn Tavenner, Administrator of the Centers for Medicare & Medicaid Services (CMS). “Thanks to the Affordable Care Act, we are taking important steps to improve the delivery of care for seniors with Medicare. These reforms aim to reduce spending while improving the quality of care, and are an important down payment on solving Medicare’s long term financial issues.”
OK, there’s a little spin in there…and as I’ve stressed before, the years-of-solvency numbers jump around in ways that have more to do with underlying economy growth than structural reforms. Nor are we out of the woods in terms of the long term cost challenges of health care in the US–and that’s true whether we’re talking private or public sector care…if anything, the public programs do a better job at controlling costs compared to the private side.
But that said, something important appears to be going on in the rate of health care spending, and some of that–no one knows how much–relates to changes in the health care delivery system of the type that are amped up in the Affordable Care Act.*
Medicare spending per beneficiary has grown quite slowly over the past few years and is projected to continue growing slowly over the next several years. From 2010 to 2012, Medicare spending per beneficiary grew at 1.7 percent annually, more slowly than the average rate of growth in the Consumer Price Index, and substantially more slowly than the per capita rate of growth in the economy. Thanks in part to the cost controls implemented in the Affordable Care Act, spending is projected to continue to grow slower than the overall economy for the next several years.
The benefits of this slower growth accrue to both tax payers and beneficiaries. For example, although the Part B premium for 2014 will not be determined until later this year, the preliminary estimate in the Report indicates that it will remain unchanged from the 2013 premium.
This is important news and it is good news. It’s news that blows some wind in the sails of those of us arguing that the ACA will help boost coverage and control costs, it is the law of the land, and we should hurry up and implement it on schedule. Those who are running around trying to kill “Obamacare” because it can’t possibly work never had much and they’ve got even less today.
*Over $700 billion in Medicare savings from the ACA also added about eight years of solvency to the Medicare HI trust fund.