Skip to content
World Health Systems Facts

Medicare: Future

Overview
Eligibility
Enrollment
Coverage

Expenditures
Financing
History
Future


“The annual reports of the Board of Trustees and the accompanying Actuarial Opinions have cautioned for a number of years about the challenges of adhering to current-law Medicare payment updates, especially in the long range. For physician services, not only are updates below the rate of inflation in all future years, but there are more immediate concerns because updates for these services are projected to be -2.9 percent in 2023 and 0.0 percent for 2024 and 2025 and certain bonuses paid to physicians are scheduled to expire in 2025. Should payment rates prove to be inadequate for any service, beneficiaries’ access to and the quality of Medicare benefits would deteriorate over time, or future legislation would need to be enacted that would likely increase program costs beyond those projected under current law in this report.”

Source: The Boards of Trustees, Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, 2022 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplemental Medical Insurance Trust Funds, June 2, 2022.


“The Trustees use the factors model to determine the year-by-year growth rates for the overall health sector over the last 50 years of the projection. Based on the factors model, the Trustees assume that the long-range per capita overall health spending growth is GDP plus 0.7 percent (or 4.3 percent) for 2046, gradually declining to GDP plus 0.4 percent by 2096 (or 4.1 percent).69 The per capita increase in overall health care costs is due to the combined effects of general inflation, medical-specific excess-price inflation (above general price growth), and changes in the utilization of services per person and the intensity or average complexity per service. The Trustees assume that beginning in 2046 (i) general price inflation will remain constant at 2.05 percent per year, as measured by the GDP deflator; (ii) excess medical price inflation will remain constant at 0.75 percent per year; and (iii) the annual increase in the volume and intensity of services per person will decline gradually from approximately 1.5 percent in 2046 to 1.3 percent in 2096 based on the key economic assumptions and elasticity estimates from the factors model, as described below.

“Excess medical price inflation for the overall health sector is assumed to grow at 0.75 percent annually from 2046 through 2096. This assumption is roughly equivalent to the difference between the growth in the personal health care deflator over the past three decades and the growth in the GDP deflator over this same period.70 Combining this assumption with the ultimate assumed growth rate of 2.05 percent per year in the GDP deflator yields the Trustees’ estimate of the long-range rate of medical price growth of 2.8 percent annually. Using the relationship between medical price growth and resource-based health sector productivity growth71 allows for the determination of medical input price growth.72 For resource-based-health sector productivity, the Trustees assume that the rate of growth will be equivalent to published research73 of 0.4 percent per year. Hence, the Trustees’ estimate of the long-range rate of growth of medical input prices is 3.2 percent.”

Source: The Boards of Trustees, Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, 2022 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplemental Medical Insurance Trust Funds, June 2, 2022.


“After combining the rates of growth from the four long-range assumptions, the weighted average cost growth rate for Part B is 3.8 percent in 2046, or GDP plus 0.2 percent, declining to 3.7 percent by 2096, or GDP plus 0 percent. When Parts A, B, and D are combined, the weighted average cost growth rate for Medicare is 3.8 percent, or GDP plus 0.2 percent in 2046, declining to 3.7 percent, or GDP plus 0 percent by 2096.

“In addition, these cost growth rates must be modified to account for demographic impacts, which reflect the changing distribution of the Medicare population by age, sex, and time-to-death.13 Those who are closer to death have higher health spending, regardless of age. The Trustees assume that as mortality rates for Medicare beneficiaries continue to improve in the future, a smaller portion of the population will be closer to death at a given age, which somewhat offsets the effect of individuals getting older and spending more on health care. This is particularly the case for Part A services—such as inpatient hospital, skilled nursing, and home health services—for which the distribution of spending is more concentrated in the period right before death. For Part B services and Part D, the incorporation of the time-to-death adjustment has a smaller effect.”

Source: The Boards of Trustees, Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, 2022 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplemental Medical Insurance Trust Funds, June 2, 2022.


Medicare: Future

Health System Overview
Political System
Economic System
Population Demographics
Health System Rankings
Health System Outcomes
Health Expenditures
Health System Financing
Coverage and Access
Costs for Consumers
Health System Resources and Utilization

Medical Personnel
Medical Training
Long-Term Services & Supports
Health Information and Communications Technologies
Pharmaceuticals
People With Disabilities
Aging
Social Determinants & Health Equity

Affordable Care Act
Medicaid
Medicare
Veterans Health Administration
Various US Health System Proposals
Health System History
Health System Challenges


Health Systems Facts is a project of the Real Reporting Foundation. We provide reliable statistics and other data from authoritative sources regarding health systems in the US and sixteen other nations.


Page last updated Jan. 27, 2023 by Doug McVay, Editor.

  • Home
  • About Health Systems Facts
    • Contact Us
    • Join Our Email List
  • Breaking News & Opinion
  • Upcoming Events
  • Seventeen National Health Systems
    • Austria
    • Canada
    • Costa Rica
    • Czech Republic
    • Denmark
    • France
    • Germany
    • Hungary
    • Italy
    • Japan
    • Netherlands
    • South Korea
    • Spain
    • Sweden
    • Switzerland
    • United Kingdom
    • United States
  • Comparing National Health Systems
    • Healthcare Access and Quality Index
    • Sustainable Development Goals Health Index
    • Mirror Mirror 2021
    • World Health Report 2000
    • International Health Systems In Perspective
    • Lessons for US Health Reform
  • Aging
  • Health System Outcomes
  • Healthcare Spending
  • Healthcare Workers
    • Health System Personnel
    • Health Workforce Training
  • Information and Communications Technologies
  • Long-Term Services and Supports
  • People With Disabilities
  • Pharmaceutical Pricing and Regulation
  • Social Determinants & Health Equity
  • Wasteful Spending
  • Various US Health System Proposals
    • Affordable Care Act
    • All Payer
    • Public Option
    • Single Payer / “Medicare For All”
    • Universal Health Coverage
  • Recommended Resources
  • Privacy Policy
    • Cookie Policy
  • Facebook
  • LinkedIn
  • Twitter

© 2019-2022 Real Reporting Foundation | Theme by WordPress Theme Detector

We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
.
Cookie SettingsAccept
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
_GRECAPTCHA5 months 27 daysThis cookie is set by Google. In addition to certain standard Google cookies, reCAPTCHA sets a necessary cookie (_GRECAPTCHA) when executed for the purpose of providing its risk analysis.
cookielawinfo-checkbox-advertisement1 yearThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Advertisement".
cookielawinfo-checkbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
CookieDurationDescription
_ga2 yearsThis cookie is installed by Google Analytics. The cookie is used to calculate visitor, session, campaign data and keep track of site usage for the site's analytics report. The cookies store information anonymously and assign a randomly generated number to identify unique visitors.
_gat_UA-71314304-21 minuteThis is a pattern type cookie set by Google Analytics, where the pattern element on the name contains the unique identity number of the account or website it relates to. It appears to be a variation of the _gat cookie which is used to limit the amount of data recorded by Google on high traffic volume websites.
_gcl_au3 monthsThis cookie is used by Google Analytics to understand user interaction with the website.
_gid1 dayThis cookie is installed by Google Analytics. The cookie is used to store information of how visitors use a website and helps in creating an analytics report of how the website is doing. The data collected including the number visitors, the source where they have come from, and the pages visted in an anonymous form.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
CookieDurationDescription
IDE1 year 24 daysUsed by Google DoubleClick and stores information about how the user uses the website and any other advertisement before visiting the website. This is used to present users with ads that are relevant to them according to the user profile.
test_cookie15 minutesThis cookie is set by doubleclick.net. The purpose of the cookie is to determine if the user's browser supports cookies.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT
Powered by CookieYes Logo