title: Three large-scale changes to the Medicare program could curb its costs but also reduce enrollment.
abstract: With Medicare spending projected to increase to 24 percent of all federal spending and to equal 6 percent of the gross domestic product by 2037, policy makers are again considering ways to curb the program's spending growth. We used a microsimulation approach to estimate three scenarios: imposing a means-tested premium for Part A hospital insurance, introducing a premium support credit to purchase health insurance, and increasing the eligibility age to sixty-seven. We found that the scenarios would lead to reductions in cumulative Medicare spending in 2012-36 of 2.4-24.0 percent. However, the scenarios also would increase out-of-pocket spending for enrollees and, in some cases, cause millions of seniors not to enroll in the program and to be left without coverage. To achieve substantial cost savings without causing substantial lack of coverage among seniors, policy makers should consider benefit changes in combination with other options, such as some of those now being contemplated by the Obama administration and Congress.
authors: RAND Corporation in Arlington, Virginia, USA. eibner@rand.org
authors: Christine
authors: C
authors: Eibner
authors: Dana P
authors: DP
authors: Goldman
authors: Jeffrey
authors: J
authors: Sullivan
authors: Alan M
authors: AM
authors: Garber
mesh_terms: D000367:Age Factors; D000368:Aged; D003363:Cost Control / Q000191:economics / Q000379:methods* / Q000458:organization & administration / Q000706:statistics & numerical data; D004608:Eligibility Determination / Q000191:economics / Q000379:methods; D005382:Financing, Personal / Q000191:economics / Q000458:organization & administration / Q000706:statistics & numerical data; D005102:Health Expenditures / Q000706:statistics & numerical data; D006291:Health Policy; D006801:Humans; D006278:Medicare / Q000191:economics / Q000458:organization & administration* / Q000706:statistics & numerical data; D018803:Models, Economic; D014481:United States
keywords: Cost Containment; Health Spending; Medicare Reform
references: Health Serv Res. 2004 Aug;39(4 Pt 1):847-64
references: 15230931
references: Health Aff (Millwood). 2005;24 Suppl 2:W5R5-17
references: 16186147
references: Health Aff (Millwood). 2010 Jun;29(6):1136-41
references: 20530343
references: Health Serv Res. 1997 Aug;32(3):283-98
references: 9240281