Has already happened in the discussion about what wages ought to be in this nation. Mary kai henry, president of the Service Employees international union. Our guest on news makers at 10 00 a. M. And 6 00 p. M. Cspan. On wednesday economists with the centers for medicare and Medicaid Services held a briefing on their Health Spending projections. Forecasters say spending will increase in coming years due to the healthcare laws coverage spangss expansions, faster Economic Growth and the growing elderly population. Its an hour. Good morning. Im the editor in chief for the as you know and the reason youre here, with all thats going on in health policy, theres great interest in many aspects of whats changing our healthcare system. Much of that interest has to do with spending, the total levels, whos paying and what they are paying for. Im pleased to continue a tradition of Health Affairs of publicing the projections prepared by the office of actuary in the centers for medicaid and medicare services. They will release a paper we are releasing today and you also have a c. D. With the graphic information that you can use along with the the materials in the paper. Youre going to hear today from representatives of the office of the actuary andrea cisco will kick us off. John poisal, Deputy Director of the National HealthStatistics Group in the office of the actuary will be helping field the questions that you may have. Im sure you know this is the product of a team and a tremendous amount of effort goes into the projections. They are of great value to policy makers. So its my pleasure to turn it to andrea to begin the presentation. Thank you for being here. Thank you for your interest in our work. Before i get started, id like to take an opportunity to thank Health Affairs for their work and help in helping us to prepare this publication and also for planning todays event. Id also take to take an opportunity to recognize all of the folks in the offices of actuary who contributed to the report, many of whom are in the audience today. Thank you all. Now for what youve all been waiting for, ill begin with an overview of our major findings. Health spending growth in 2013 is expected to have remained slow at 3. 6 . This would be the fifth Consecutive Year of growth under 4 . The slow projected rate of growth is due to the sluggish economic recovery, lower payment growth to medicare, as well as continued slow growth in the utilization of medicare services, as well as continued increases in private Health Insurance costsharing requirements, including continued increases in the deduction of High Deductible Health plans. Faster economic groit and population ageing are expected to contribute to faster projected Health Spending growth and in particular for 2014 we project a growth rate of 5. 6 and for 2015 through 2023, 6 per year on average. Although Health Spending growth is expected to pick up, the average rate of growth is slower than experienced over the last two decades. Over the full projection period, Health Spending growth is projected to grow 5. 7 per year on average and outpace Economic Growth by 1. 1 Percentage Points on average. The growth of Gross Domestic Product is expected to rise to 19. 3 by 2023. And before we get further into our results, id like to provide a bit more background and context for our projections and touch on a few key meth logical points. Our projections are developed using actuarial technique and in accordance with the specific spending and enrollment impacts of the Affordable Care act, particularly the coverage expansions were estimated using recent and updated version of the offices of shoe ware. The projections are produced in a manner consistent with the projected baseline scenario of the 2014 medicare report and medicare reports are projected to grow as opposed to the scheduled growth set by the growth rate formula and current law. After this include this includes a reduction of 21 on april 1st of 2015. If you would like any further information about our model methodology, please see end note one in our paper. We provide a citation, the web location and the updated version that applies to this set of projections will be available when the embargo lifts. Okay. In this chart we put into context the relationship between Health Spending and Economic Growth. Namely, the effective economics on projected Health Spending is an overoftening theme of our paper. And as you can see looking at nh. E growth and they have been growing at similar rates since 2010 and they are projected to do so in 2013 as well. Nh. E. Growth is projected to ak set rate in 2014 due to the coverage expansions under aca. The relationship between Health Spending and Economic Growth, Health Spending tends to respond to changes in Economic Growth with lag, becomes more evident. While projected Economic Growth reaches a peak in 2018, we project n. H. E. Growth will this reflects the effect of faster enrollment by the baby boom generation and faster growth as the population ages. So taking over the entire projection period, nh. E. Growth is predicted fastest than gdp. To translate those growth rates into the effect of the purple line on the chart because they have been growing at similar rates in 2010 and expected to do so again for 2013, the health share of gdp has remained stable since 2010 and is projected to do so in 2013. In 2014 and after, the health share is expected to rise as projected nh efshgs further outpaces Economic Growth due to the ekt of the coverage expangs, faster Economic Growth and the aging population. Over the period, the health share of gdp is projected to rise from 17. 2 in 2012 to 19. 3 by 2023. And, again, to help put the projected acceleration in nhe growth into context, its important to remember in other of our major findings while growth is projected to accelerate, those growth rates are slower than exexperienced over the last two decades. Projected Health Spending growth is slower on average over the entire projection period by 1. 5 . Thats comparing the aqua bar through 2008, a growth rate of 7. 2 , to the 5. 7 per year on average growth rate for the projection period. In addition, its also important to note that the projected growth during the key time periods of acceleration are also slower than experienced over the last two decades. And so that would be for 2014 and 2015, the first two years of the Affordable Care act coverage expansion as well as over 2016 through 2023 period, due to the ekt of faster projected Economic Growth and the effect of population aging. Over the next three slides ill provide a high level overview of our findings by service and good, payer and sponsor. Shawn will take you through a more detailed look over the second half of the presentation. By servicing good, the distribution of Health Spending is not expected to change much over the projection period. With the projected shares of Health Spending devoted to the three largest sectors, hospitals shs physician and Clinical Services and prescription drugs, remaining the same by 2023. How we arrive there in terms of projected spending growth during each time period for the Major Services, however, does differ. So following continued projected slow growth in 2013, spending for each of the major sectors is projected to grow faster in 2013. Continued robust spending growth is expected for the Major Services over the remainder of the projection period, due to the continued effect of the coverage expansions, faster Economic Growth, the ages of the population and for drugs higher expected use of specialty drugs. The exception is the projected slowdown in growth for physician and Clinical Services in 2015. This is attributable to the expiration of increased medicare payments for physicians and lower payments to Medicare Advantage plans. Now for our trends by payer. The effect of the coverage expansions starting in 2014 and the aging of the population are two key trends that are evident in the projected spending trends by payer. The availability of expanded coverage through medicare in states that choose to participate is expected to increase in the medicare Health Spending by two Percentage Points to about 18 . Despite the presence of new enrollment in private Health Insurance plans through the coverage expansions and faster Economic Growth driving faster private Health Insurance spending growth in 2014 and after, the aging of the baby boom generation out of private Health Insurance and into medicare is expected to result in a decline in the private Health Insurance share of Health Spending from 33 to 32 . Correspondingly, the medicare share spending is projected to increase from 20 to 22 over the projection period. Additionally, the share of the population comprised of medicare enrollees is expected to rise as well from 15. 8 to 19. 8 over the projection period. And reflecting the effect of both expanded coverage and the transition of the baby boom generation into medicare, out of pocket spending is projected to decline in share of total Health Spending from just under 12 in 2012 to just under 10 by 2023. And finally ill take you through the trends by sponsor. And again here the effect of the coverage expansions and the aging of the population play a major role it felt coverage expansions through medicare, the 90 to 100 federal matching rates for states that expand coverage and premium and cost sharing subsidies for marketplace plans are expected to increase the share of Health Spending sponsored by the federal government over the projection period. These factors are expected to contribute to the decline in the household share of spending over the period. Also contributing to the increase in the federal share and the decline in the household share is the shift of the baby boom generation into medicare. It also plays a finally, by 2023 the share of Health Finance by federal state and local governments is expected to rise to 48 of Health Spending from 44 in 2012. And with that ill turn the presentation to shawn, who will take you through the key findings by time period. Thank you very much. I want to thank everybody in the room or anybody watching on tv for their interest in our work. We appreciate it. Were happy to answer any questions that you guys have. Id also like to thank Health Affairs for their help in give getting this paper published. Weve had a great relation with Health Affairs. I wanted to point out one thing which i sthi a new innovation that at least i havent seen before. If you look at line charts and economic writings, you see recession bars all the time. For the first time that i have seen, you see a recovery bar. Ill discuss the significance of this in my first slide. Alen, thank you and your staff. So then you mention im going to break this period into three time periods. And the first time period is 2013. The first thing i want to mention is 2013 is still a projection. In the a few months our office will come out with historical estimates on Health Spending. Until that happen, 2013 is a projection. We are projecting 3. 6 Health Spending growth in 2013, which would mark the fifth Consecutive Year of growth under 4 . Gdp growth is estimated for 2013 at 3. 4 . And so since these growth rates are similar, this would mean that the share of gdp or the health share of the economy is projected to remain constant in 2013 at 17. 2 . Now, heres where i want to bring back in e 2 and the value of it in that andrea mentioned the important relationship between Health Spending and Economic Growth. This exhibit shows the recovery for each of the last two recessions. In 2013, the fourth year after the recession ended, it was 3. 4 . In nongdb was higher in the n each of the last two recessions. Its important in that its not primary think recession. Its really the recovery from the recession that has been slower for this recession than past recessions, which is one factor laid to slower healthcare spending. Now ill break out 2013 by payor. For medicare were expecting growth at 3. 3 . This is as a result of Slower Growth utilization across owl services. Lower payments of 2 begin in april 2013 that was included in the budget control act of 2011. For medicaid, were expecting growth of 6. 7 . Sh th slide gives a four Year Growth Rate so it masks the acceleration. The faster acceleration part of it was due from a rebound of a 2012 low. But the other part of it was aca man date temporary payment increase to primary care physicians that was one factor in the higher spending growth projected for medicare. For private Health Insurance, were expecting low projected growth of 3. 3 . And this has to do with continuing increase in requirements in addition to having more people and higher deductible health plans at the time in an environment of lower Economic Growth. And as far as by sector, for hospitals, growth is projected to slow to 4. 1 . This is due to medicare yutrylization. Medicare is affected by sequestration. The reason for the slowdown, the primary reason is different in that we are projecting that growth in prices for physician and Clinical Services will be the slowest in 2013 since 2002. So slow price growth was the main reason for the slowdown in physician and Clinical Services spending. For prescription drugs were expecting acceleration of 3. 3 . This is coming off of a low of 0. 4 in 2012. Here, its really a rebound off the 2012 low, which as many know was mainly due to a large number of topselling brand name drugs that lost patent protection in 2012. So the impact was felt in 2012. That kept spending growth down in 2012. So in 2013 there were some additional brand name drugs that lost patent protection. There was an a dollar value of drugs that lost patent projection. Thats the primary reason for the acceleration. The next period 20142015, which are the two years that youll see the major impact of the coverage expansions. For medicare and private Health Insurance, higher growth is of 12. 8 for medicare and medicaid and 6. 8 for private Health Insurance for 2014 is due to higher use as a result of the covered expansions where were expecting a reduction of 9 million in 2014. In 2015 were expecting additional 8 million reduction in the uninsured which will keep private Health Insurance growth strong at 6. 9 . For medicaid were projecting a slow down in growth of 6. 7 where the increase in coverage, the further increase in the coverage expansion high enrollment is projected to be Something Like thatly offset by the expiration of the temporary increase in payments to medicare excuse me to medicaid primary care physicians. So for out of pocket, we are expecting negative growth in 2014 and then low growth in 2015 as a result of the coverage expansions, people moving from uninsured where they pay 100 out of pocket to to having Insurance Coverage and some of that Insurance Coverage is going to have costsharing subs which further reduces the out of pocket burden. For medicare we are expecting continued growth in which is keeping growth slow. But in 2015 were projecting a further deceleration of 2. 7 and the deceleration is partially attributable to lower payments to Medicare Advantage plans. Now, by sector in this period, hospital is projected to gradually accelerate to 4. 5 in 2014 and 5. 1 in 2015. And this is as a result of increase in use due to coverage expansions. For physician and Clinical Services the acceleration is predicted to be 5. 9 . People that gain coverage through coverages they are expected to use more physician and Clinical Services than hospital care as they get use of their new coverage. For 2015, though, growth is projected to decelerate as a result of the not just the temporary Medicare Medicaid payment increases, but also the lower payments in the Medicare Advantage plans in that year. For drugs, were expecting higher use because of the coverage expansions. Not just the newly insured but also folks that had less kunl and moved to more generous coverage that was maybe lower cost sharing for drugs. Were projecting to contribute to higher use. But also impacting not just 2014 but also 2015 growth is the new hepatitis c treatments that have impacted 2014 and 2015 growth in drug spending. So the final time period that i will discuss is the eight years of projection period 2016 to 20e 23. For medicare we are expecting afrnl growth of 27. 3 . So the first factor here is continued about 3 . But were expecting faster growth of 4. 3 , which is which would be higher than what has been experienced in the recent past. And this is as a result of modest increases in use and in payment rates. Not getting as high as it has been in the recent past, but coming off the low of the past few years. For medicare, were expecting 6. 8 average annual growth during this period and here enrollment is projected to stabilize. However, the growth is projected to be driven by high enrollment of the subpopulation of aging and disabled Medicare Beneficiaries, which are the most expensive to cover in that population. Finally in this slide, private Health Insurance growth is projected to be lower than medicare and medicaid at 5. 4 but also this growth would be higher than it has been in the recent past. And this is as a result of faster projected Economic Growth linked to higher use of services than than we have seen in the recent past. By sector, andrea mentioned the shared distribution slide and we saw the distribution changed for the Major Services. Therefore, we can expect that the growth rates will be similar and thats what we found thats what you can see in this slide. Hospital and physician growth is expected to be driven again by modest increases in use of these services as a result of not just improving economic but also population aging. Prescription drug spending is expected to be 5. 7 average during this period, a little bit lower than the other two sectors. Were still expecting that the majority of use of drugs will still be generics, however the growth is expected to be driven by the expense of specialty drugs. Just to conclude, Health Spending growth is projected to be slow at 3. 6 in 2013 and then afterwards, 2015, growth is expected to be influenced by the coverage expansions. Afterwards, growth is projected to be influenced by faster Economic Growth as well as population aging. The growth rate that were projecting is would be higher than the recent past, but much lower than the previous two decades. So were not projecting that that growth will get back to its rapid pace of the 90s and early 2000s. We are projecting 1. 1 points of a differential between nh. E. Growth and gdp, which expecting to 19. 3 by 2023. With that, well get some questions. We have ample time for questions. Id ask that you take the microphone, identify yourself. I see question right here at the end. Good morning. I have a question about the line graph that was in the slide presentation, this one here showing nhe and gdp growth. Last years report, there was a line here growth and expend insure absent the aca. You dont have that here. And i dont see it in the report. Do you have those numbers . Did you not do that analysis this time . Right. We are no longer estimating or quantifying the impact of the Affordable Care act on national Health Spending. The reason for hatha is now that the Affordable Care act has been in place for well over years, it is becoming difficult to estimate what the world would look like in the absence of the Affordable Care act. So as we mentioned, the coverage expansions and other aca provisions, we no longer estimate a quantitative impact. Craig palmer, ada news. Going to the charts, take exhibit 1 for example. Do we read those charts in the same context as the everything is actual up to 2013 and then 2013 and so forth is projected . Yes. Thats correct. I was hoping you could talk a little bit about whats different about the period Going Forward from the 1990s, the not the recession, why youre expecting a little bit faster growth, but Slower Growth than we saw in the 1990s and early 2000s. One thing we highlight in the report and something we have discussed in our prior projections is not only the impact, the depth and severity of the recent recession, but also the effect of the slow recovery. So that is something that certainly affects Health Spending as we have projected for 2013. And certainly having major Health Reform legislation in the projection period is something that would differentiate this period from the last. We discussed slightly faster growth in 2014 due to the leading edge of the coverage expansions and the demographic shift thats coming with the baby boom generation and again as we have discussed in the reports for many years, the long running relationship between Health Spending and Economic Growth. Hi. I didnt hear you talk at all about the impact of any changes in the Delivery System which we hear a lot about. Can we take from that that you dont see that as impacting the trajectory of Health Spending growth in the next few years in any real meaningful way . There are a number of demonstrations under way at the Innovation Center at cms and to the extent there is any impact in our projections, they are here. As for right now, its still too soon to say what the ultimate impact of these delivery reforms will be. Ive got two questions for you. And you mentioned talking about a return to faster rate of growth and you mentioned growing economy, aging of the population and the coverage expansion. How would you rank those in order of importance . Im not sure you would necessarily rate them in order of importance. I think its a matter of chronological order. As we showed in our graph, there is an effect of the coverage expansions in 2014 and the effect of faster projected Economic Growth goes through the remainder of the projection and then also the baby boomers have already started to come into medicare in late 2011 and then that effect goes through the projection period and contributes to the peak in 2020. So youre kind of suggesting they are all about equally as important and come into play at different times. They come into play at different times. In the press release, you break down the timeline and in the report you break down the timeline into chunks. You have 2013, 2014, 2015 and then 2016 through 2023. And it seems like the return to a faster pace growth comes in that 2016 to 2023 period. In terms of accurately reflecting whats in the report, i also see in the abstract that you say 2015 to 2023. So its just a question, what should we use . 2016 to 2023 as the return to the faster growth or 2015 to 2023 . 2015 can be included as well. Because in 2015 not only do you have the effect of somewhat faster projected Economic Growth but then you also have the effect of the continuation of the coverage expansions. Thank you. I might suggest too in addition to that that when you talk about your three perspectives and the three contributors to drivers of growth, the one i might tab down a little bit might be on the aging side of those three. And really that income and that change in the Economic Growth is one of the core drivers particularly of private spending. So that tends to be the one that we look towards often when we produce our projections. These are all important drivers. But i would suggest that the aging piece would probably be might be third on the list. The coverage expansions, thats mainly 2014 and 2015, a little bit in 2016. But after that, the coverage expansion has a minor role. As john mentioned, Economic Growth would sort of be the major role in that after the coverage expansion beyond 2016. The report estimate that 9 million americans gain Health Insurance in 2015 2014. That figure is somewhat lower than other estimates. Is that perception right and is there any explanation . So we cant speak to lower or not, but we do have on our web tables we have a projection of the uninsured, we have a projection of employeesponsored insurance enrollment, we have individual Health Insurance enrollment, individual private Health Insurance enrollment and we have medicare and medicaid. If you look at that table, thats pretty similar to what we had in past years. So its not that different. And when talking about comparisons and most people use cbo. Thats not something that we have done an analysis of, so we cant give you any specific answers. 9 million just to gain medicare. Those are not insured. Right for medicaid, there could be some people that had individual individually purchased insurance in 2013 and 2014, they are now eligible for medicaid so they join medicaid. Theres a lot of moving around the categories. So its difficult to determine its difficult to give a complete answer because theres a lot of moving parts to the enrollment questions. We include both they would be a mix, so we cant differentiate between the two. Jim landers of the dallas morning news. You say in the beginning that one of the things thats put a break on spending this last year has been the rise of High Deductible Health plans and more out of pocket spending. But those seem to decline in the future projections as private Health Insurance share and the household share of spending both decline. Is that trend going to continue or are you sort of flat lining it . Whats going on with Consumer Spending in the future . Okay. Well, before we get started on that, its important to recognize that what we show is at an aggregate level, so all out of pocket spend sometimes the aggregate number for the entire country may not be the same as an individual persons experience. But after that, part of the reason why the out of pocket share declines, as we mentioned the effect of the coverage expansion, having more people with insurance and potentially more generous coverage, as well as the shift of the baby boom generation into medicare. So those are some of the primary reasons why thats the case in the projection period. In terms of the increases in cost sharing, thats something that has been seen in the recent history. Thats a continuing factor. But in terms of whether that will continue i mean, certainly in terms of the economics of it through the recent recovery growth has remained relatively slow so its still early to say whether thats a lasting shift or a function of economics. The cost sharing issue is a little bit confusing in that you might expect that as cost sharing is passed on to the patient to the enrollee, that out of pocket expend insures would increase at a higher rate but oftentimes those higher cost sharing requirements are a disensen tif for someone to seek out care and can offset that ratio that would have been passed on the the enrollee. In tighter economic times, these decisions factor into the care that people seek. Youre projecting a 6. 8 increase in private Health Insurance premiums for 2014, which seal seems like a fairly high jump. I know some of it is economic, some is more people getting coverage in the marketplace. But elaborate a little bit more on why thats going up. So theres that number is a total premium number so increases in private enrollment factor in. So its not at that everybodys individual premiums are projected to go up 6. 8 , because we are projecting 1. 5 million additional people on private Health Insurance. 1. 5 increase in private Health Insurance enrollment for that year. So as far as your question goes, the reasons for the increases in growth is some people we are projecting are moving from less generous in addition to the higher enrollment, some people are moving to less generous plans to more generous plans. Therefore, the use would increase on those plans. And i believe those are the two main reasons for the higher growth projected for 2014. Theres more benefits more generous plans youre talking about right. Many people have moved from less general ros plans to more generous plans in 2014, in addition to the higher enrollment. Theres the two factors there. I wondered if there were any of the findings that particularly surprised you, numbers that were lower or higher than you might have expected when you first started. Well, i think in terms of the projections result, over the last several papers we have talked about a number of these things. I think its very interesting being able to take a look chronologically at the effects of the Affordable Care act, so a major piece of Health Reform legislation, as well as the demographic shifts as well as we often discuss, a fundamental part of our model and our result is the effect of economics. So i think its very interesting that you have each of those factors figuring prominently within the projections. And also the reduction in the uninsured over the projection period as well. Im going to throw in a question of my own. You mentioned that spending will increase but not to the same rate as in the last two decades. You compare 5. 7 as a full projection period to 7. 2 to n you take out 09 to 2012 which had lower growth. Im wondering you use 90 to 08 instead of to 2012 as a comparison period . I think the main reason is we didnt want the slow recovery from the recession to influence the comparison because in the projection period theres no recession thats forecast. So obviously recession impacts Economic Growth and Health Spending to a great degree. So i believe the main reason for that is just to try to take out the Great Recession from the comparison. This last recession did impact Health Spending more and more immediately than several of the previous recessions and it really did distinguish itself and lent itself to being excluded. I wanted to followup on that question and sarahs question about the comparison between the projection period and the historical period. It seems like on the ledger balancing factors that might accelerate growth versus those that slow down, youve got more people getting coverage in the future, youve got an aging population which distinguished that from the previous period, but youre finding a slower Historical Rate of growth. If i understand you correctly, youre suggesting that tamping down growth in the future will be pressure on medicare payments, some economic pressure at least in the short term. But it seems those factors must be powerful to outweigh the factors that would seem to suggest we should have have faster growth historically give ten higher rates of Insurance Coverage, the increased federal spending on coverage, and the aging population. Does that question make sense . I think so. I think one factor is that weve had these increases weve had these increases in high deductible plans an were not expecting the cost sharing to go away, there will be a higher level of cost sharing than there was in the 902008 period. So that will be one factor at keeping growth lower than it was in that period. I dont know if you guys want to say anything else. In terms of the demographic shift, while the population is getting older, at least in the short term, its also bringing relatively younger Medicare Beneficiaries in, which is somewhat of a factor as well. One of the causes for the Slower Growth has to do with utilization of services and medicare. And weve been looking fairly extensively at that. Its our best analysis those rates will start to tick back up to something closer to the historical levels, but not likely to some of the historical highs in the past. So the expectation is that overall spending at least in terms of medicares contribution, is not likely to accelerate to some of the those alltime highs we have observed in the past. Can you talk a little bit more about what may be going into that lower utilization pattern in medicare and why it will take such a long time to recover . Part of it is an economic story that were investigating in the office as well. There are other things that have kept general spending down in addition to the utilization piece. For example, theres been low inflation. Most recently as you might be aware, the general inflation and certain components feed into the prices that are used to update medicare payments. And so in addition from back to the utilization side, as the baby boomers have started to come in beginning in 2011, the average age of the Medicare Beneficiary has actually fallen sm somewhat. So youve got a slightly younger and healthier beneficiary, so they plays out in the immediate future as the baby boomers continue to enroll. But as the population is on medicare and starts to age into the older age groups, expenditures and utilization is expected to pick back up. You mention in the paper that as people move from private insurance into medicare, they move from being in the most expensive group within private insurance to the cheapest group in medicare on average. From an n. H. E. Perspective, given lower payments and medicare benefit design relative to the commercial product that someone has when they are 64, do we actually see a reduction in National Health expenditures so we put out age estimates Health Spending by age on a historical basis. But we dont have those numbers for people that are age 64. So its difficult to make a definitive conclusion thats the case. But certainly the benefit design is different and another factor is were not sure what sort of plan from a person that moved from a phi plan to medicare. Are they choosing a more supplemental plan that could be more generous than they had in the past. Its difficult to make additional questions . Yeah. Just on that question of younger potentially healthier people going into medicare, what does that really mean . Are people choosing to enroll in medicare at 62 or 3 or 4 or is it just that they are younger not chronologically, but maybe health wise at 65 than they have been in the past . The idea is that, because there are a lot of people who are turning 65, the baby boom generation, so maybe not so much necessarily about individual people, but certainly the baby boomers at 65 people do tend to be healthier than maybe 75, 85. And there are a lot of them shifting over that period. So thats what were sort of talking about in aggregate. I think andrea mentioned too in her part of the presentation that the projection of Medicare Beneficiaries as a percentage of the population is supposed to increase roughly 4 Percentage Points. O so thats a function of so many of the baby boomers reaching medicare age and enrolling in the program as a result. A question about the physician spending projection. You mentioned your projections included 21 , i think, reduction thats coming april 1st. Actually, no. Im sorry ill let you finish. I wanted to clarify. Sure. The 21 reduction is in current law and thats under the Sustainable Growth rate formula. But what our projection our projections are consistent with the projected baseline scenario in the medicare trus trustees report. Payments are expected to grow at 0 for 2015 and then. 6 through the remainder of the projection period per year. These projections do not include the cut under the Sustainable Growth rate formula. Thank you. In terms of the increase in the highest specialty drugs and increase in hepatitis treatments, does this analysis include any offsetting factors for someone getting cured of hepatitis and therefore not having ongoing costs in the future as a result of having that disease or any of the other types of drugs out there . But thats the one everyone is talking about. Not explicitly. Its something that our office is looking into. But theres no explicit reduction in Hospital Service or physician and Clinical Services because of higher drug use. So theres nothing explicit, no. Do you have a sense of when youll be able to measure that . I know there are certain projects or experiments that your office is particularly curious about. Those are outside the context of this report. And certainly overtime we will continue to review the actuarial estimates from our office and examine the literature and other material. At this time, its outside the scope of the project. Thank you. I would only add that we really rely on some of the technical analyses to drive the decisions that we make and the judgments that we put into these reports and so were optimistic that as the technical data comes out and Empirical Research plays out, those types of things could be included. But were sort of eager to get those results and empirical estimates to see where things lead. Craig palmer. Theres one of these Service Sectors that seems to jump off the page and i dont really understand whats going on there. The dental Services Market you show a projection of the overall spending of 3. 6 in 2013 but only 1. 9 for dental, which by the way, is the only Service Sector below 2 . And then again in 2014, while the Health Economy is expanding at 5. 6 , you show dental at 3. 1. Whats going on there . Well, two major things. In terms of the relatively low projected growth for 2013, certainly the impact of the recent slow Economic Growth is something that plays a key role in projection for denl dental expenditures and for historical estimates as well. For 2014, while there is somewhat of an increase, with the coverage expansions, the increase in projected spending for, say, the much larger shares of national Health Spending say, for instance, for hospital if physicians, drugs somewhat outweighs the acceleration for dental in 2014. I would add that for some of the newly insured, you know, they may or may not have very good dental coverage, so their impact would be slower than, lets say, for physician and Clinical Services where definitely going to be fully covered for that in most health plans. Hi. Sarah with fox again. Not to beat a dead horse, im having a little trouble reconciling in my head were heading more people to our Health Insurance system but youre projecting cost growth will be slower specifically when you try to segment out the effect of the recession. Some of the factors and some pressures on medicare, is that pretty much the story of whats going on . I guess what makes the 2016 to 2023 period different from the 1990 through 2008 period . Well, again, you know, were also coming off its important to note that because of effect of the recession and slow recovery, were coming off a slow base of spending growth. Thats important to note. And then again, in terms of the demographic shift, you do we do show the lagged effect of the projected increase in Economic Growth and thats commensurate with the projected acceleration in Economic Growth which may not which isnt the same that it was in the historical period. And say for instance for private Health Insurance, again you have the shift out of private Health Insurance of the baby boom generation and into medicare also happening too and then of course the commensurate shift into medicare of the relatively younger baby boomers into a group of beneficiaries that tend to have much higher per beneficiary spending. What i would add to that is that in the late 90s and early 2000s we had High Percentage in drug spending growth. So, you know, for the sector there was maybe 70 of it were brand name drugs. So even though specialty drugs were projected to drive the clothe, its still slow at 5. 7 growth versus the double digits growth you saw between 1998 to 2003. So there are factors that kept growth in that period high, but in the projection, especially as the economy grows as the health share economy grows, people are more interested in controlling that growth. As far as the we mentioned that the high deductible hel health plans but the negotiation of payment rates were expecting it to be stronger than in 1990 when when the health share economy was lower. I see no more questions. I want to thank you for your on the topic. Remember were on embargo. Thank you. That concludes our session today. At 2 00 the connecticut debate. Cspan campaign 2014. More than 100 debates for the control of congress. Secretary of state john kerry hosted a ceremony wednesday horn honoring the appointment of the special representativto