Slower Growth in Medicare Spending — Is This the New Normal?

There are indications that the unsustainably rapid growth in Medicare spending has recently slowed — and that this slowdown is not a fluke, but rather the result of tighter Medicare payment policies whose effects will only be bolstered by the Affordable Care Act. For many years, policymakers have appropriately singled out federal spending on health care — especially Medicare — as the most serious long-term threat to the nation's fiscal health. Over the past four decades, the average growth in Medicare spending per enrollee has exceeded the growth in per capita gross domestic product by 2.6 percentage points per year. This trend is unsustainable: if it continued, Medicare would consume all federal revenues by 2060. But there are indications that Medicare spending growth has slowed. One highly visible gauge of Medicare spending trends is the standard monthly Part B premium, which is set . . .