Medicare spending is likely to grow more significantly than a recent estimate by Medicare and Social Security trustees found, according to new projections from the CMS.
CMS actuaries see even higher Medicare spending
By 2020, Medicare spending will account for 4.31% of the economy, the CMS projects (PDF), rather than the 3.99% estimated by Medicare and Social Security trustees in a mid-May report. The CMS assumed Congress would override pay cuts scheduled by law for doctors and hospitals, which would boost Medicare spending. The trustees' report (PDF), which found that the trust fund would be depleted by 2024—sooner than was previously expected—included the scheduled cuts in its analysis.
The CMS called an expected 29.4% reduction to Medicare physician payment in 2012 "implausible" after Congress has repeatedly blocked far smaller scheduled reductions. Scheduled reductions have been halted since 2003. Under the CMS alternative, which assumes Congress won't allow the cuts, Medicare spending for physicians and outpatient services would total $416.5 billion by 2019, or roughly 19% more than the $349.1 billion should Medicare cutbacks go through.
Actuaries with the CMS also dismissed planned Medicare cutbacks based on productivity as unsustainable in future years. "It is reasonable to expect that Congress would find it necessary to legislatively override or otherwise modify the reductions in the future to ensure that Medicare beneficiaries continue to have access to healthcare services," according to the CMS. The CMS projections assume productivity reductions would be phased out after 2019.
Send us a letter
Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.