A Unified Cost-Sharing Design for Medicare: Effects on Beneficiary and Program Spending
U.S. Health Reform—Monitoring and Impact July 2019
24 Pages Posted: 7 Aug 2019
Date Written: July 22, 2019
In this report, we examine a potential reform to Medicare that would simplify coverage for fee-for-service beneficiaries, streamline cost-sharing obligations under a uniform deductible for Medicare Parts A, B, and D services, and create an out-of-pocket maximum to protect beneficiaries from high financial burdens. We assess the potential impacts of the unified cost-sharing policy on beneficiary and program spending using MCARE-SIM, a new microsimulation model designed to estimate the effects Medicare policy reforms. Under the policy, beneficiary out-of-pocket spending would decline or remain similar for 35.1 of the 39.4 million fee-for-service Medicare beneficiaries and 4.3 million beneficiaries would experience at least a 5 percent increase in spending. Medicare spending would increase by $31.2 billion (a 5.7 percent increase) relative to current law in 2020.
Keywords: Medicare, cost-sharing, health spending, insurance, microsimulation
JEL Classification: H51, I13
Suggested Citation: Suggested Citation