Figure 5. Medicare outlays with bandwidths: 1968-90^1,2.

¹Outlays include benefits plus administrative expenses.

²The conditional bandwidths around the baseline projections scenario provide one indicator of variability. The standard error associated with annual percentage increases in Medicare outlays for 1969-1982 was multiplied by a t-distribution value of 2.16 to derive the conditional “95 percent” bandwidths. The calculated bandwidths are approximate and are used as a rough guide in assessing variability and uncertainty. It is important to keep in mind the potential dangers of extrapolating historical measures of variability into the future. That is, there can be no assurance that future variability will replicate historical variability.

SOURCE: Health Care Financing Administration, Bureau of Data Management and Strategy, Office of Financial and Actuarial Analysis.