Monterey, CA : Health Care Costs Are Declining : Is This A Long-Term Trend Or A Short Term Blip?

by Richard Kuehn on 04/29/12

Monterey, CA : Health Care Costs Are Declining : Is This A Long-Term Trend Or A Short Term Blip?  View From A Non-Profit Serving Carmel, Carmel Valley, Carmel-by-the-Sea, Gonzalez, Greenfield, King City, Marina, Monterey, Pacific Grove, Pebble Beach, Salinas, Seaside And Soledad California

As President Obama's health care reform is debated in the U.S. Supreme Court, another debate continues on the sidelines.  Spending on health care has flattened out over the last couple of years, flying in the face of what many experts had predicted, up 4% per year in 2009 and 2010 for Medicare and Medicaid.  This is the slowest rate of growth in more than five decades, according to the Centers for Medicaid and Medicare Services.  But is this a trend or just a fallout from the recession due to people not wanting to spend money on prescription co-pays and gas for going to the doctor and to pick up prescriptions?  Some experts are saying that the change could be attributable to changing behavior of both physicians and patients.  "The tectonic plates might be beginning to shift, Karen Davis, the president of the Commonwealth Fund, a non-profit research group, told the New York Times.  "It's hard to believe everything that's been tried over the last decade to slow spending wouldn't be making a difference," she said.  Still, the article says that experts were surprised at a drop in spending on some hospitalized seniors on Medicare because their health care coverage wasn't impacted by the recession.  But many seniors that I have spoken to have been deeply impacted by the recession.  Some are having to take in their children who no longer have a job, or give them financial assistance.  Many have also seen the value of their assets plummet.  They were also hurt because they had to forgo a cost-of-living increase in Social Security payments for three years because the government claimed that there was no increase in the cost of every day goods and services.  Energy prices soared, food prices went up and many paid more for medication.  So, in my view, many seniors are cutting back on health care and other expenses to cut costs.  We all must pay close attention to this issue with the important elections coming up this year.  I am hopeful, but not fully convinced, that this trend will continue.  If it does, it reduces the temptation of politicians to further cut Medicare and Medi-Cal.  If the growth in Medicare costs comes down just 1% per year faster than economic growth, the projected long-term deficit would fall by a whopping one-third.