No one knows what spending will be
Kaiser Health News' Phil Galewitz had a story this week on the latest forecast by the Office of the Medicare Actuary, with a prediction that health-care spending will double by 2020.
If you read the whole story, you'd find that the authors of the study are just guessing. In economist-speak, one of the study authors, Sean Keehan, put it this way: "These projections are definitely uncertain and that increases as we move along in the projection period."
Phil, who by the way is a member of Health News Florida's board, noted that the actuaries were off in two major projections last year. Both were vast over-estimates.
The latest projection assumes the economy is recovering and that Americans -- who have cut way back on discretionary spending on health care -- will go back to their old ways. I'm not so sure about either one.
As long as we're all guessing, I'll forecast that spending will start to stabilize in 2014, when some of the major pieces of the Affordable Care Act go into effect. Assuming that the law doesn't get thrown out or watered down, insurers will be forced to offer a roughly comparable minimum package and ist their prices side-by-side in an easy-to-read format.
That worked on Medigap coverage; heck, it works for just about anything. For a market to function, consumers have to know what they're buying and be able to compare prices.
Maybe the headline on the new forecast story should be: 'Actuaries admit they don't know what spending will be.'