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NY TIMES: Medicare Spending Growth

January 24, 2012

Slower Growth in Health Spending” (editorial, Jan. 12) misses the point when it suggests that the Affordable Care Act — a law whose ink was barely dry at the time — had a negligible effect on health care spending in 2009 and 2010. In fact, recent growth trends suggest that the law is particularly effective at reining in Medicare spending, which now makes up 15 percent of the federal budget. It does so with modest changes to provider reimbursements and by introducing efficient preventive care practices in anticipation of accountable care organizations."

The most significant change equalizes payments to Medicare Advantage plans. According to the Congressional Budget Office, that change alone saves more than $135 billion over the next decade.

Early estimates of the law’s effect on Medicare spending projected that the program would grow at an average yearly growth rate of 6 percent between 2010 and 2020, down from 8 percent average yearly growth from the previous two decades. Real-time estimates from Standard & Poor’s measured even slower growth in 2011.

Structural changes to the Medicare program that create incentives for preventive care and care coordination are already producing better than expected results, and in time the effect of these changes is potentially even more significant. While it is far too soon to start a victory lap, signs of progress abound.

The writer, a Democrat, represents Connecticut’s Second District in the House.