CBO projects drop in cost to eliminate SGR

February 08, 2013
Area(s) of Interest: Payor Issues and Reimbursement 

U.S. spending on health care spending slowed in 2012 to 3 percent—or $551 billion—the lowest recorded rate of growth since 2000, according to a new report from the nonpartisan Congressional Budget Office (CBO). The report, which provides an overview of the nation's economic outlook, also found the cost of a permanent fix to the Medicare sustainable growth rate (SGR) to be dramatically lower than previous estimates—with the price tag now estimated to be $138 billion over 10 years, $100 billion less than previous estimates.

“Now is the time to end this failed policy once and for all and protect access to care for seniors now and in the future," said CMA President Paul R. Phinney, M.D. “We will be in Washington, D.C., next week to urge Congress and the administration to take advantage of the fact that the cost of repealing the SGR is lower than it has been in many years."

The CBO report also lowered spending projections for Medicare, noting that the program's bills have been "significantly" lower than expected for three years straight. The report showed that spending on Medicare Parts A and B have risen by an average of 2.9 percent annually since 2009, compared to an average of 8.4 percent annually from 2002 to 2009.

The CBO predicts that Medicare spending will remain at around 3 percent of the gross domestic product until 2019, climbing to 3.5 percent by 2023, for a total of $1.1 trillion in spending over the next 10 years.

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