The latest budget projections have federal spending on Medicaid programs dropping below projections, while Medicare is suffering from the reverse. It appears that the shifting of reimbursement for drugs from Medicaid to Medicare is at least partially responsible for the financials, but increased utilization of physician and outpatient hospital services is also a major contributor to the increase.
This last point illustrates just how ineffective the price controls used in Medicare have become. While per-service prices have been held flat, utilization, driven by the use of more services and higher-cost services, has been the driving force behind the need to increase Part B premiums by 11% for 2007.
Meanwhile, preliminary indications are that Part D costs will come in under (the already highly inflated) expectations, although how this can be determined based on one quarter’s worth of data is a mystery to me.
Perhaps those actuaries have gotten much better at predicting direction by looking in the rear view mirror.
Jul
13
