The Challenge of Predicting Future Medicare Expenses

As I pointed out in a recent post, experts have been debating what has caused the recent slowdown in medical spending in the United States. They are also try to figure out whether that slowdown will continue. And figuring this out is pretty darn important, because it has a major impact on how we budget for future Medicare expenses. Consider this picture from a recent study in Health Affairs, which looks at how much money we might be spending, per person, on Medicare in upcoming years, depending on how quickly Medicare costs grow:

If the slowdown continues, we might end up spending $1500 less per year, per Medicare enrollee, by the year 2021. Multiply that by the number of people on Medicare, and we might just save ourselves $401 billion, in the year 2021 alone. We are getting close to talking about real money now!

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