title: Means-testing in Medicare.
abstract: The Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003 introduces means-testing of premiums and benefits in two ways. It will means-test the Part B premium, setting higher premiums for better-off seniors. More importantly, it will offer much more generous drug benefits, at low or zero premiums, to lower-income beneficiaries. This paper argues that additional means-testing could improve Medicare's financial picture. It proposes a strategy in which future Medicare beneficiaries with higher incomes will pay for cost-increasing but quality-improving new technology, possibly with prefunding that begins before retirement.
authors.affiliation: Health Care Systems Department, Wharton School, University of Pennsylvania, Philadelphia, USA. pauly@wharton.upenn.edu
authors.forename: Mark V
authors.initials: MV
authors.lastname: Pauly
mesh_terms: D000368:Aged; D005249:Fees and Charges; D006297:Health Services Accessibility; D006801:Humans; D007342:Insurance Benefits; D007356:Insurance, Pharmaceutical Services; D016345:Medicare Part B / Q000191:economics* / Q000458:organization & administration*; D008875:Middle Aged; D014481:United States