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Affordable Care Act could lead to lower Medicare spending

January 26, 2015
by Lois A. Bowers, Senior Editor
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Could the Affordable Care Act lead to changes that will affect skilled nursing, hospice and home healthcare and lower Medicare spending? Authors of a new analysis published in Health Affairs think it could.

Per-capita Medicare spending in 2011 increased with age for beneficiaries aged 70 to 96 years, then decreased for older beneficiaries, finds the analysis of Medicare spending from 2000 to 2011. Per-capita spending in 2011 was $7,566 for 70-year-old beneficiaries and $16,145 for 96-year-olds, authors Patricia Neuman, ScD, MS; Juliette Cubanski, PhD, MP, MPH; and Anthony Damico found. They analyzed data from a five-percent sample of claims for Medicare-covered services under Parts A, B and D from the Chronic Conditions Data Warehouse of the Centers for Medicare & Medicaid Services and found that the relatively high per-capita spending of beneficiaries in their 90s was largely the result of higher spending on skilled nursing facilities, hospice and, to a lesser extent, home health services. When these services were excluded, they said, per-capita spending peaked at age 89, not 96, in 2011.

“This article provides new data that could help improve care management for Medicare’s oldest beneficiaries,” the authors conclude. Reforms begun under the Affordable Care Act could change care patterns and spending for older patients, many of whom have chronic conditions, they add. “These efforts, if successful, could lower costs and improve care for Medicare's octogenarians, nonagenarians, and centenarians,” the authors write.

Neuman is senior vice president and director of the Program on Medicare Policy and the Project on Medicare’s Future of the Kaiser Family Foundation. Cubanski is associate director of the foundation’s Program on Medicare Policy. Damico, a former statistical analyst for the foundation, now is an independent consultant.