2 Unknown Mysteries when it comes to Medicare

One; there are a large amount of Medicare beneficiaries who have been deciding to opt out of government run insurance programs. As an alternative they are choosing private plans, Medicare Advantage plans being offered.  This trends strength challenges the predication coming from the Congressional Budget Office and nobody can fully explain this.

Two, that the traditional Medicare growth in spending has slowed as opposed to the historical expectations and trends. While there may be theories on this we still do not fully understand what could be causing this either. Trying to understand these 2 unknown mysteries is very important in that this could help understand structure and costs of Medicare as we move into the future.

This may at first appear to be unrelated but yet may be connected. Regardless of what kind of health coverage one may have, doctors and hospitals are inclined to treat the insured patients the same way. A patient who has traditional Medicare or a patient who is privately insured and admitted to the hospital; as an example with something like pneumonia will receive the same standard of care.

It is still unknown why exactly the Medicare Advantage plans are growing in popularity and at the same time why Medicare’s spending has been slowing. But what is now know is that the 2 are related and that while Medicare Advantage plan growth does not entirely explain the slower Medicare spending growth. But it is one of the pieces to this puzzle.