Some good fed’l. deficit news? Medicare cost containment working

GRAPHIC: Projected Medicare spending for 2011-2020 includes a drop of more than $500 billion since 2010. This chart, by the Center on Budget & Policy Priorities, is based on CBO estimates.

SALT LAKE CITY – Federal budget projections show an improving picture for Medicare. That’s important both for the deficit and for almost 300,000 Utah seniors who rely on the program.

<a href=”″ target=”parent”>The Congressional Budget Office now expects</a> Medicare to spend $500 billion less by 2020 than it had projected just three years ago.

In the long term, health care – especially Medicare – is expected to be the biggest cause of federal budget headaches. That’s why this new estimate makes Paul Van de Water, a senior fellow at the Center on Budget and Policy Priorities, cautiously optimistic.

“Even in the somewhat blase world of Washington budgeting, that’s a lot of money,” he said. “The health-reform legislation also contains a long list of other changes, which hold the potential for slowing health-care cost growth in the longer run.”

Medicare’s critics say the savings are not enough to make up for the wave of baby boomers now entering the program, and that it’s hard to predict if the savings will continue. Chapin White, senior health researcher for the Center for Studying Health System Change, agreed, although he pointed out that Medicare is doing a much better job of controlling costs than are private insurance programs.

“In Medicare, it seems like there has been a fundamental shift in how the program is operated,” he said. “They set prices, and they set them in a fairly conservative way.”

The CBO projections are in part confirmed by the rating agency Standard and Poor’s, White said, which also reduced the amount it expects Medicare to spend in the future.

The CBO projections are online at <a href=”″ target=”parent”></a>.

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