Some Good News on Medicare

While Medicare still has long-term funding problems because of the coming baby boom eligibility, there is some good news. The cost the program spends per beneficiary actually has been declining. This article has the details. The article is short on explanations, and it is difficult to generate them with confidence. But mostly people are using fewer expensive treatments. That might be because the influx of early boomers is skewing the beneficiary populations to younger, healthier people. But it also could be the increase in preventive care, especially by the Medicare Advantage plans that the administration is trying to eliminate.

The recent pattern reflects two main factors. One is that the baby boom generation is entering the program. In the long term, that’s a problem for Medicare’s finances because the number of people it must care for is going to surge. But in the short term, it skews the group enrolled in Medicare toward a younger, healthier population.

The second factor is more surprising and consequential. Over the last few years, Medicare patients have been using fewer expensive medical services, particularly hospital care and prescription drugs. The budget office is increasingly persuaded that such a pattern is going to last for a while.