CBO Forecasts Lower Medicare & Medicaid Costs

Earlier this week, the Congressional Budget Office (CBO) stated reduced costs for medical services and labor have reduced the 10-year projected cost of Medicare and Medicaid by $89 billion. Medicare spending is projected to decrease by $49 billion from 2015 and 2024, while Medicaid spending is expected to drop by $40 billion. Despite the long-term projected drop, federal spending for major health programs will increase this year by $67 billion or approximately 9 percent. Medicaid is projected to grow by $40 billion, or 15 percent. The short-term increase is due to the ACA, including its Medicaid expansion and the financial assistance to help people purchase health insurance. CBO has also stated that it expects Medicare outlays to increase by about $12 billion this year.

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