Chart of the Day: The Great Medicare Spending Mystery


Here it is: the biggest question mark in the entire federal budget. The 2014 Medicare Trustees Report is out today, and it shows, rather remarkably, that the cost per person of Medicare in 2013 was absolutely flat compared to 2012. Even more remarkably, they expect the combined increase over the next two years to be zero as well. In other words, Medicare costs are growing considerably slower than the inflation rate.

And now for the trillion-dollar question: How long will this slowdown last? The historical data in the report, along with future projections, suggests that between 2006 (when the prescription drug benefit began) and 2018, Medicare costs will have grown, on average, at exactly the rate of inflation. In real terms, that means zero growth over a 12-year period. But Medicare’s actuaries don’t expect that to last. Starting in 2017 they expect high growth rates again, leading to Medicare spending outpacing inflation.

This is by far the biggest unknown going forward in the federal budget: Will Medicare spending continue to increase slowly, or will it revert to the higher growth rates of the early aughts? You can make a pretty good case either way. But no matter what anyone tells you—including me—don’t be fooled. The real answer is that We. Just. Don’t. Know.

DOES IT FEEL LIKE POLITICS IS AT A BREAKING POINT?

Headshot of Editor in Chief of Mother Jones, Clara Jeffery

It sure feels that way to me, and here at Mother Jones, we’ve been thinking a lot about what journalism needs to do differently, and how we can have the biggest impact.

We kept coming back to one word: corruption. Democracy and the rule of law being undermined by those with wealth and power for their own gain. So we're launching an ambitious Mother Jones Corruption Project to do deep, time-intensive reporting on systemic corruption, and asking the MoJo community to help crowdfund it.

We aim to hire, build a team, and give them the time and space needed to understand how we got here and how we might get out. We want to dig into the forces and decisions that have allowed massive conflicts of interest, influence peddling, and win-at-all-costs politics to flourish.

It's unlike anything we've done, and we have seed funding to get started, but we're looking to raise $500,000 from readers by July when we'll be making key budgeting decisions—and the more resources we have by then, the deeper we can dig. If our plan sounds good to you, please help kickstart it with a tax-deductible donation today.

Thanks for reading—whether or not you can pitch in today, or ever, I'm glad you're with us.

Signed by Clara Jeffery

Clara Jeffery, Editor-in-Chief

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