Seniors' Health Costs May Be Moderating but the Need for Long-Term Care May Be Growing

A Harvard University study published in Health Affairs determined the per-beneficiary growth rate of Medicare spending decelerated from 1992 to 2012, reports Forbes . Program spending per enrollee rose by 3.8 percent annually until 2004, then grew only 1.1 percent between 2005 and 2012. Medicare spending grew much faster overall, mainly because many more people turned 65 and enrolled in the program. However, spending for each beneficiary grew less rapidly than forecast, with actual spending about $3,000 less than predicted by 2012. Analysis found 50 percent of the lower-than-expected spending was linked to fewer acute cardiovascular-related medical events, with half of that savings credited to more use of medications that prevent or control conditions like high blood pressure, high cholesterol, or diabetes. There were few new drug treatments developed for these conditions, but consumers used existing drugs more regularly, partly thanks to lower prices and the development of the Medicare Part D drug benefit. Hospitalizations for heart disease and strokes have fallen by 56 percent and 41 percent since 1999, respectively. However, the study offers evidence that growing human longevity will require the United States to shift resources from medical care to long-term care.