Revamping traditional Medicare’s benefit design and restricting “first-dollar” supplemental coverage could reduce federal spending, simplify cost sharing, protect against high medical costs, decrease out-of-pocket spending for many beneficiaries, and provide more help to those with low incomes — but would be unlikely to achieve all of these goals simultaneously, finds a new analysis by the Kaiser Family Foundation.
The analysis, which draws upon policy parameters put forth by the Congressional Budget Office, the Medicare Payment Advisory Commission and other organizations, examines a general approach to reforming Medicare that has been a focus of Congressional hearings and featured in several broader debt reduction and entitlement reform proposals, including the House GOP health plan released last week.
The Foundation’s new report models four different options for a modified benefit design, rather than a specific existing proposal. Each of the four options includes a single deductible, modified cost-sharing requirements, a new cost-sharing limit, and a prohibition on first-dollar Medigap coverage. The analysis projects how spending by beneficiaries, Medicare, Medicaid, and other payers would change under each option, if implemented in 2018. The results shed light on the policy tradeoffs inherent in alternative approaches to modifying deductibles and cost-sharing requirements under traditional Medicare, particularly in the context of budget discussions. Among the findings from analysis of the four options:
The analysis was conducted by researchers at the Kaiser Family Foundation and Actuarial Research Corporation and is part of ongoing work by the Foundation to examine the effects of proposed Medicare changes on the program’s beneficiaries, the federal budget and other stakeholders.