This article is an update from one published in 2019. It includes the latest historical data and methodologies, leading to new health care price projections.
Economic damages experts have the difficult task of forecasting health care price inflation, especially for life care plans. This paper examines the strengths and weaknesses of two commonly used methods of forecasting the price of health care goods and services: One directly uses the 10-year price projections from the Office of the Actuary of the Centers for Medicare & Medicaid Services (CMS); the other is to forecast future price increases based on historical health care data embedded within the Consumer Price Index (CPI) published by the Bureau of Labor Statistics (BLS). Here, CMS and BLS health care price indexes are mapped together, definitional differences are examined, direct out-of-pocket spending is segregated from insurance-related spending, and the historical price growth rates are compared and analyzed.