According to a N.Y. Times editorial, the Congressional Budget Office has consistently underestimated costs savings from a variety of institutional changes to Medicare. For instance:
Medicare enacts the prospective payments system (PPS) for reimbursing inpatient hospital stays.
- The CBO projected total Medicare spending will rise to $60 billion in 1986.
- Actual Medicare spending in 1986 was only $48 billion.
Medicare begins paying skilled nursing facilities and home health care services a set fee per patient.
- The CBO projected a 9.1% reduction in Medicare spending.
- The actual savings turned out to be 50 percent greater in 1998 and 113 percent greater in 1999 than the budget office forecast.
The Medicare Modernization Act created Part D prescription drug coverage.
- The CBO projected that spending on the drug benefit would be $206 billion.
- Actual spending was nearly 40 percent less than that.