ABSTRACT:Complications from chronic illnesses often do not emerge for many years. Current federal cost projection methods are constrained by ten-year cost estimates, which capture increases in near-term intervention costs but not changes in long-term costs. Current methods also cannot easily capture the cost implications of changes in disease progression. Type 2 diabetes is a prime example of a chronic illness with long-term health and cost consequences. We present results from an epidemiologically based model that projects federal costs for diabetes under alternative policies, and we discuss the potential changes in the federal budget process needed to capture the full impact of these interventions. T h e h i g h c o s ts a s s o c i at e d w i t h c a r i n g f o r people with chronic diseases is one of the most pressing health policy issues in the United States today.1 The baby-boom generation is entering its retirement years, and advanced age is associated with the development of several costly chronic illnesses. As a result, Medicare and other payers will be under tremendous financial pressure as costs rise from predictable demographic and epidemiological forces.
Current Practice, The Ten-Year Budget Window, And DiabetesForecasting future health care costs for the federal government is done primarily by the Office of the Actuary (OACT) at the Centers for Medicare and Medicaid Services (CMS) for the administration and by the Congressional Budget Office (CBO) for Congress. The CMS Office of the Actuary has lead responsibility for w 9 7 8 1 S e p t e m b e r 2 0 0 9