The Good, the Bad, and the Ugly of Projected Medicare Spending Growth | Health Care Economics, Insurance, Payment | JAMA Forum Archive | JAMA Network
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The Good, the Bad, and the Ugly of Projected Medicare Spending Growth

In January, Richard Kronick and Rosa Po published a policy brief on projected Medicare growth for the Office of the Assistant Secretary for Planning and Evaluation (ASPE), which advises the US Secretary for Health and Human Services. Their findings are either encouraging or troubling, depending on one’s confidence in some aspects of the Affordable Care Act (ACA).

Kronick and Po summarized the key points of their brief in the graph below:

This graph breaks projected Medicare spending into 3 components for each year, under a scenario created by the US Social Security Administration’s Office of the Chief Actuary (OACT). The vertical axis is percentage of gross domestic product (GDP). The green bars show spending in the absence of any demographic change (aging) or in the absence of changes in cost of care above that of the growth in the economy (excess cost growth). Because those are the only 2 components of growth in Medicare spending as a proportion of GDP, the green bars are necessarily constant in size for all years. The effect of aging alone on the Medicare budget is in blue and excess cost growth is shown in red.

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