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Megan McArdle

Why Has Medicare Cost Growth Slowed Down?

Medicare growth is slowing and the reasons why may be surprising.

Recently, Medicare has been growing more slowly than its historical average. The Congressional Budget Office decided to investigate why, and the answers will probably surprise you.

If you had to guess why Medicare was growing more slowly, you'd probably come up with one of two answers: "Obamacare" or "the recession." (No bonus points for guessing which party prefers which answer.) But the CBO largely rejected both those answers. It found a small role for declining reimbursement rates, and a roughly equal effect for the changing number of seniors who are enrolled only in Part A (since most of these are seniors who are still working, this may be a result of the recession forcing people to work longer in order to prop up their retirement funds).