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Health and Human Services Secretary Kathleen Sebelius testifies on Capitol Hill in Washington on Dec. 11. / Susan Walsh, AP

WASHINGTON - Health care spending per Medicare recipient will slow in the future, because of lower payments to doctors, fewer services per beneficiary and a lower average age of beneficiary, according to a February monthly budget review by the Congressional Budget Office.

"Under current law, spending per person in Medicare will increase much more slowly during the next decade than it has during the past few decades," CBO states in the review.

In the first five months of Fiscal Year 2014, Social Security spending rose by $16 billion over the same time period in 2013; Medicaid went up by $8 billion, but Medicare, CBO reported, "was virtually unchanged."

The news is highlighted as part of a blog post Monday from CBO's director, Doug Elmendorf about the overall budget projections CBO made last week.

He wrote that net federal spending for Medicare, Medicaid and the Childen's Health Insurance Program will increase from 4.5% of GDP in 2013 to more than 6% GDP in 2024 and that the number of people younger than 65 without health insurance will drop from 57 million to 31 million.

Meanwhile, Elmendorf wrote, the number of people receiving Medicare benefits will increase by one-third simply because more Americans will be old enough to receive benefits, and most federal spending in 2024 will be for people older than 65 because so many people will age into Medicare.

"These are developments that we expect will occur under current law and therefore are important considerations in thinking about possible changes in law," Elmendorf wrote.

The White House has been reporting the low Medicare spending for months, citing the lowest health spending rate in 50 years and saying the change could bring job growth.

But projected lowered spending comes in part because a law passed by Congress in 1997 requires that Medicare provider payments may not exceed the rate of economic growth. However, every year, Congress overrides that law to raise doctors' payments.

However, the review said the 2010 Affordable Care Act played a key role in lowering costs, including provisions that penalize hospitals that readmit patients within 30 days of a hospital stay. That change was meant to ensure patients receive follow-up care after they leave the hospital, receive medications that interact well with each other, and the best possible care to prevent infections.

Also, accountable care organizations and medical homes that are rewarded for quality, cost-effective care, have helped reduce Medicare costs, the review said.

As Baby Boomers enter the Medicare system, the review said, there will be more younger, healthier beneficiaries in the pool who will be less likely to need care for chronic health conditions.

A paper just out from The Brookings Institution by Alan Auerbach of the University of California, Berkeley, and William Gale of Brookings, starts by saying, "Over the past few years, the long-term fiscal situation has improved," and counts health care slowdowns as an "area of improvement."

That doesn't mean the budget deficit has been fixed, Auerbach said, but that spending is unlikely to "spiral out of control." But even with lowered health costs, as well as several other factors deemed good for the budget, Auerbach wrote that the cost of paying for the debt would be the highest in history by 2024.

Follow @KellySKennedy on Twitter.



Copyright 2014 USATODAY.com

Read the original story: Law, healthier beneficiaries helping trim Medicare costs

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