CMS actuaries predict that national health expenditures will rise over the next 10 years

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CMS: Final reform bill to increase expenditures by $311 billion

CMS actuaries predict that national health expenditures will rise over the next 10 years by $311 billion under the new reform law, but warned that actual impact is highly uncertain and that scores of provisions in the package aim to reduce the cost of care.

That's $77 billion more than an earlier assessment of the version of the reform proposal approved by the Senate in December, which served as the core of the legislation that was signed into law in March. Under the earlier proposal, federal actuaries said expenditures would increase $234 billion over the next decade.

Even while the dollar amount is different, the underlying reasons for the increase are the same. The CMS expects that expanded coverage will lead to greater utilization of healthcare services coupled with lower federal payments to providers.

“Although several provisions would help to reduce healthcare cost growth, their impact would be more than offset through 2019 by the higher health expenditures resulting form the coverage expansions,” the report released Thursday by the CMS' Office of the Actuary says.

Republicans who have said all along that the reform package would increase spending rather than rein it in were quick to seize on the report's findings.

“This is a bad law and, according to this analysis, seniors have the most to be concerned about when it comes to the future of their healthcare,” said Rep. Dave Camp of Michigan, the senior Republican on the House Ways and Means Committee, in a statement.

The Office of the Actuary report also estimates that the financial impact of the Medicare provisions in the law are expected to save the program $575 billion, from 2010 through 2019. The lion's share of those savings come from reductions to the inflationary payment updates for doctors and hospitals.

Based on those savings, the Medicare trust fund is expected to be in the black until 2029, an extension of 12 years over earlier estimates of when it would go bust.

http://www.modernhealthcare.com/article/20100423/NEWS/304239966/0#

[luckytxn 2,264]

If history is any guidance then the costs will at least double.

[I AM NOT THAT GUY 5,715]

If history is any guidance then the costs will at least double.

That's not Federal costs. That's the cost to users of healthcare, the public at large, minus all the old people, and all the poor people. Those costs will be shifted to the healthcare providers, and the states, respectively.

[ready4ONE 5,400]

That's not Federal costs. That's the cost to users of healthcare, the public at large, minus all the old people, and all the poor people. Those costs will be shifted to the healthcare providers, and the states, respectively.

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[one...two...tree 2,762]

Which report are they referring to?

From the CMS Projection Accuracy Report:

Total Private Spending and Total Public Spending

• The CMS year-one and year-two projections of public spending growth have tended to be more accurate than that of private spending growth; however, the range of year-to-year differences between the projected growth and the actual growth in the third year of the projection period has been larger for the public estimates compared to the private estimates.

• Since 1997, private spending growth has been overestimated by an average of 0.6 percentage point, 0.7 percentage point, and 0.7 percentage point in the first, second, and third years of the projection periods, respectively. On a year-to-year basis, the difference between projected and historical growth rates has ranged from −2.1 to 2.8 percentage points for the first projected year, −2.0 to 3.9 percentage points for the second projected year, and −1.9 to 4.2 percentage points for the third projected year. The mean absolute difference between projected and actual spending growth has been 1.3 percentage points in year one, and 1.4 percentage points in both years two and three.

• Spending growth for public sources of funding has, on average, over predicted in the first year by 0.1 percentage point, underestimated by 0.3 percentage point in the second year, and underestimated by 0.6 percentage point in the third year. On a year-to-year basis, the difference between projected and historical growth rates has ranged from −1.5 to 1.6 percentage points for the first year of the projection, from −3.9 to 3.2 percentage points for the second projected year, and −4.9 to 3.7 percentage points for the third projected year. The mean absolute difference between projected and actual public spending growth is 0.8 percentage point in the first year, 1.7 percentage points in the second year, and 1.6 percentage points in the third year.

......

Also....

Projections are inherently subject to uncertainty. This uncertainty stems from a number of factors that can influence the relationship between the projections and the actual spending outcomes.

First, revisions to the historical NHE series and other exogenous data sources are incorporated each year, reflecting the latest data available at the time of estimation. These revisions can include everything from minor updates to source data to significant changes in category definitions and/or methodology. For the most part, revisions are slight and reflect updated source data. The largest revisions to the historical NHE data tend to occur following quinquennial benchmarks, where changes in methodology and definitions are incorporated and the full time series (1960 — forward) is open for revision

http://www.cms.gov/NationalHealthExpendData/downloads/ProjectionAccuracy.pdf

Bill wants free health care.

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