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Answers to Questions for the Record Following a Hearing on the Budget and Economic Outlook for 2015 to 2025 Conducted by the House Committee on the Budget 1 (March 20, 2015)

handle is hein.congrec/cbo2111 and id is 1 raw text is: MARCH 20, 2015 Answers to Questions for the Record Following a Hearing on the Budget and Economic Outlook for 2015 to 2025 Conducted by the House Committee on the Budget On January 27, 2015, the House Committee on the Budget convened a hearing at which Douglas W Elmendorf, Director of the Congressional Budget Office, testified about CBO report The Budget and Economic Outlook: 2015 to 2025 (January 2015), www.cbo.govpublication49892. Following that hearing, Chairman Price and other Members of the Committee submitted questions for the record. This document provides CBO answers. Chairman Price Question. CBO indicates in its report somewhat slowed per beneficiary spending in the short term. Yet, we know that demographics in our country have not changed: 10,000 baby- boomers are aging into the Medicare program every day. Does this temporarily slowed rate demonstrate that the current Medicare program is now sustainable? Has anything fundamentally changed the projections that the Medicare trust fund would be exhausted, as the Medicare Trustees project, in 2030? Answer. CBO's projections of Medicare spending are subject to a considerable degree of uncertainty. A particular challenge currently is assessing the extent to which the recent slowdown in the growth of health care spending can be attributed to temporary factors such as the recession or, instead, to more enduring developments. Studies have generally concluded that some of the observed reduction in growth cannot be linked directly to the weak economy, although they differ considerably in their assessment of the relative importance of other factors. In August 2013, CBO released a paper that reviewed the observed slowdown in growth in Medicare spending between the 2000-2005 period and the 2007-2010 period.' That review suggests that demand for health care by Medicare beneficiaries was not measurably diminished by the financial turmoil and recession and that, instead, much of the slowdown in spending growth was caused by other factors affecting beneficiaries' demand for care and by changes in providers' behavior. Accordingly, over the past several years, CBO has substantially reduced its 10-year and long- term projections of spending per person for Medicare. For example, over the past 5 years CBO has reduced its projection of Medicare outlays (net of premiums paid by beneficiaries 1. Michael Levine and Melinda Buntin, Why Has Growth in Spending for Medicare Fee-for-Service Slowed? Working Paper 2013-06 (Congressional Budget Office, August 2013), www.cbo.gov/publication/44513.

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