Lost in much of the federal budget news was a projection by the Congressional Budget Office, reported in Monday’s New York Times, that the country will spend 15 percent less on Medicare and Medicaid in 2020 than the CBO projected just three years ago. Have we finally found a way to bend the infamous health care cost curve, and if so, what does this mean for consumers?
Since our economy has not been strong over the past three years, it is hard to say whether the health care cost trend will last when (hopefully) we get back to full employment. The other interesting question is whether the trend can make its way into individual and small business health insurance markets.
The ACA is being implemented in an environment in which underlying health care cost increases, at least for government health care programs, are unusually tame. It’s not clear at this point what the competitive environment will look like with health insurers offering new ACA compliant plans. However, the timing of the major changes coming at the end of 2013 might be fortuitous.
