Medicare Spending Per Beneficiary Grew Just 0.4% in 2012

Accelerating a three-year trend, spending per Medicare beneficiary rose just 0.4 percent in fiscal year 2012, far slower than the 3.4 percent increase in gross domestic product per capita, according to a report released by the HHS Office of the Assistant Secretary for Planning and Evaluation.

Since fiscal 2010, Medicare spending has averaged 1.9 percent annual growth per beneficiary, more than one percentage point under GDP's average annual per capita growth of 3.2 percent in the same three-year period, according to the ASPE report. Over the next decade, projections from the Congressional Budget Office and the CMS Office of the Actuary put Medicare spending growth per beneficiary at roughly the same rate as per capita GDP.

The Patient Protection and Affordable Care Act is partly responsible for putting the brakes on spending growth through its restrictions on payment increases for Medicare Advantage plans, beefed up fraud measures and value-based spending tactics.

The CBO said those parts of the PPACA will save $10 billion from the Medicare program in 2012. CMS actuaries estimated a higher $13.5 billion in 2012 savings, equivalent to a more than 2 percent reduction per beneficiary that year. Both the CBO and the Office of the Actuary said the law will slow spending growth per beneficiary by about 1 percentage point each year for the next decade.

More Articles on Medicare Spending Growth:

Commonwealth Fund: 10 Policies That Can Stabilize Healthcare Spending
Republicans Reopen IPAB for Debate
Where Medicare Stands: A Discussion With Dr. Oliver Fein of Weill Cornell Medical College

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