CBO: Medicare spending growth continues to slow

A report published this week by the Congressional Budget Office found that projected Medicare spending has dropped from last year’s estimate, although economists are uncertain what has caused the slowdown and how long it will last (Source: “Expected Health Spending Declines (Again),” New York Times, July 16, 2014).

According to the CBO report published on Tuesday, Medicare is now expected to make up 4.6 percent of G.D.P. in 25 years, down from 4.9 percent in last year’s estimate. That’s a big enough difference that it buys the Medicare trust fund about six more years of solvency.

C.B.O. points out that it can’t pinpoint the cause of the recent slowdown or its durability, which is why it’s not changing its fundamental view of where Medicare spending is heading over the very long term. “How long the slowdown might persist is highly uncertain,” the report says.