Uncertainty About Projections of Medicare Cost Growth: Technical Paper 2004-13

Over the next several decades, Medicare costs are going to increase significantly. Previous analysis has looked at the potential range of costs using a deterministic, scenario-based analysis. This provides a range of potential outcomes but provides no information as to the likelihood of these outcomes. The analysis here systematically considers the uncertainty inherent in forecasting Medicare costs using a Monte Carlo approach that reflects both the uncertainty in forecasting health costs and the uncertainty association with economic and demographic projections. Within 100 years, the 90