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Insights on possible future Medicare costs
Old 02-05-2014, 03:25 PM   #1
Recycles dryer sheets
kmt1972's Avatar
Join Date: Mar 2013
Location: Scarsdale
Posts: 175
Insights on possible future Medicare costs

CBO came out with a report

Which had some insights on medium term medicare costs among other things.
It projected CPI to be around 2% 2014-2017 and 2.4% 2018-2024.

It points out

"Under current law, spending for Medicare is expected
to grow by an average of 6 percent per year over the
next 10 years. That growth can be attributed in roughly
equal parts to increasing caseloads and rising costs per
beneficiary. CBO projects that Medicare caseloads will
expand at an average rate of 3 percent per year, as growing
numbers of baby boomers become eligible for benefits
at age 65. "

"CBO projects that spending per beneficiary will also
grow at an average rate of 3 percent per year over the
coming decade"

"Offsetting receipts for Medicare in 2013
reached $93 billion, constituting a little more than
30 percent of all offsetting receipts. Over the coming
years, those receipts will rise at about the same rate as
spending for Medicare"

Which implies the Medicare premiums should rise 3% a year since spending per beneficiary is also around 3%.

This seems to contradict what Kaiser came out with recently in

Raising Medicare Premiums for Higher-Income Beneficiaries: Assessing the Implications – Tables | The Henry J. Kaiser Family Foundation

where it seems to imply that Medicare premiums will rise 5.4% during the 2015-2022 period.
"There are no solutions...there are only trade-offs." - Thomas Sowell

Looking to retire or semi-retire by 45 based on our net worth going to $6 million outside our house.
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