Comments on: CBO Medicare Forecast Accuracy http://healthcare-economist.com/2009/11/11/cbo-medicare-forecast-accuracy/ Thu, 09 Feb 2012 08:10:30 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Tim http://healthcare-economist.com/2009/11/11/cbo-medicare-forecast-accuracy/comment-page-1/#comment-7080 Tim Fri, 09 Apr 2010 20:06:52 +0000 http://healthcare-economist.com/?p=2907#comment-7080 The Medicare Program: When Medicare was instituted in 1965, there was no Congressional Budget Office. Instead, in 1967 House Ways and Means analysts estimated the cost of the program. Medicare, they predicted, would cost $12 billion in 1990. (1) They were wrong—by a staggering factor of 10. The actual spending in 1990 was $110 billion. (2) And Medicare costs continue to skyrocket. Through the first 9 months of 2009, Medicare has cost taxpayers $314 billion and that price tag continues to grow by 10%. Medicare Part A: In 1965, the House Ways and Means Committee estimated that Medicare Part A, the hospital insurance part of the Medicare program, would cost $9 billion in 1990. (4) Once again, they were wrong. The actual cost of Part A in 1990 was $67 billion. (5) In 1994, the analyst responsible for the severe underestimate admitted that even when accounting for inflation, “the actual [Part A] experience was 165% higher than the estimate. Medicare Home Care Benefit: In 1988, the projected 1993 cost of the Medicare Home Care Benefit was $4 billion. (7) The actual 1993 cost was $10 billion. Social Security: When the Social Security Act of 1935 was being debated in Congress, the cost projections for the program extended all the way to 1980. At that time, it was estimated that the federal government would pay out $4 billion in Social Security payments in 1980. (9) In reality it paid out a staggering $108 billion. End Stage Renal Disease (ESRD) Program: Congress passed entitlement legislation that provided kidney dialysis for citizens suffering from ESRD in 1972. It was predicted that the program would cost taxpayers $100 million in 1974.11 The estimates were off and the program ended up costing $229 million in that year. The Medicaid Disproportionate Share Hospital (DHS) Program: The Medicaid DHS Program is used by states to aid hospitals that treat a high number of Medicaid and uninsured patients. In 1987, Congress estimated that the cost the program would be $1 billion in 1992.13 The actual cost was 17 times larger than the congressional estimate. Medicaid DHS cost taxpayers $17 billion in 1992. The Medicare Program: When Medicare was instituted in 1965, there was no Congressional Budget Office. Instead, in 1967 House Ways and Means analysts estimated the cost of the program. Medicare, they predicted, would cost $12 billion in 1990. (1) They were wrong—by a staggering factor of 10. The actual spending in 1990 was $110 billion. (2) And Medicare costs continue to skyrocket. Through the first 9 months of 2009, Medicare has cost taxpayers $314 billion and that price tag continues to grow by 10%.

Medicare Part A: In 1965, the House Ways and Means Committee estimated that Medicare Part A, the hospital insurance part of the Medicare program, would cost $9 billion in 1990. (4) Once again, they were wrong. The actual cost of Part A in 1990 was $67 billion. (5) In 1994, the analyst responsible for the severe underestimate admitted that even when accounting for inflation, “the actual [Part A] experience was 165% higher than the estimate.

Medicare Home Care Benefit: In 1988, the projected 1993 cost of the Medicare Home Care Benefit was $4 billion. (7) The actual 1993 cost was $10 billion.

Social Security: When the Social Security Act of 1935 was being debated in Congress, the cost projections for the program extended all the way to 1980. At that time, it was estimated that the federal government would pay out $4 billion in Social Security payments in 1980. (9) In reality it paid out a staggering $108 billion.

End Stage Renal Disease (ESRD) Program: Congress passed entitlement legislation that provided kidney dialysis for citizens suffering from ESRD in 1972. It was predicted that the program would cost taxpayers $100 million in 1974.11 The estimates were off and the program ended up costing $229 million in that year.

The Medicaid Disproportionate Share Hospital (DHS) Program: The Medicaid DHS Program is used by states to aid hospitals that treat a high number of Medicaid and uninsured patients. In 1987, Congress estimated that the cost the program would be $1 billion in 1992.13 The actual cost was 17 times larger than the congressional estimate. Medicaid DHS cost taxpayers $17 billion in 1992.

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