About My Health Careers Internship MedBlogs Contact us
Medindia LOGIN REGISTER
Advertisement

Curbing Medicare Costs Could Drive Elderly Americans Out of Program

by Bidita Debnath on May 9, 2013 at 1:23 AM
Font : A-A+

 Curbing Medicare Costs Could Drive Elderly Americans Out of Program

The rising cost of Medicare can be cut through strategies such as raising the eligibility age and increasing premiums.

But those moves could drive many elderly Americans from the program, leaving them with limited access to health services, according to a new study.

Advertisement

Researchers simulated the likely outcomes of three approaches for lowering Medicare costs -- imposing a premium for Medicare's hospital insurance, switching to a premium support program that subsidizes the cost of purchasing private coverage, and increasing the eligibility age to 67. Each approach has been widely discussed as a way to slow rising Medicare costs.

Researchers found that adding a means-tested premium for Medicare Part A would cut spending by 2.4 percent, while increasing the eligibility age would trim spending by 7.2 percent. The largest savings would come from a move to a premium support or voucher plan, which could cut spending by up to 24 percent if pegged to growth in the consumer price index, according to the findings published in the May edition of the journal Health Affairs.
Advertisement

But each of the approaches would cause some seniors to lose Medicare coverage. The analysis showed that imposing a premium on hospital coverage would trim enrollment by nearly 2 percent and increasing the eligibility age to 67 would cut the number of seniors covered by Medicare by about 14 percent. A premium support program could prompt between 4 percent and 13 percent of seniors to drop coverage, due to divergence over time between the cost of coverage compared to the amount of the credit.

"Each of these policies can save money for the Medicare program," said Christine Eibner, the study's lead author and a senior economist at the RAND Corporation, a nonprofit research organization. "The question is what to do about those people who lose Medicare as the cost rises or they are excluded. Those people may not be able to find alternative health coverage."

Researchers warn that increasing the number of uninsured elderly Americans would put a strain on hospital emergency departments and could pose a serious consequence for population health.

Projections suggest that without new policies, Medicare will account for 24 percent of federal spending and 6 percent of the nation's gross domestic product by 2037. While the Affordable Care Act introduced a number of changes to slow rising Medicare costs, many policy experts contend that fundamental changes in Medicare are needed to change the program's cost structure.

Researchers examined the likely impact of three policy options that have been widely discussed, modeling the likely impacts of each strategy if it was imposed beginning in 2014 and running through 2036.

The possibility of creating a premium for Part A (hospital) Medicare coverage indexed to recipients' income was first suggested in the middle 1990s by the bipartisan Kerrey-Danforth commission on entitlement reform. Researchers modeled a premium that would begin at 5 percent of the program's cost for recipients with the lowest incomes, rising to 25 percent of the program costs for those with the highest incomes.

Increasing the Medicare eligibility age to 67 has been proposed on many occasions and mirrors a change made for full Social Security eligibility.

Changing Medicare to a program that provides older Americans with voucher or other premium support to purchase health insurance coverage has been proposed by several groups, including U.S. Rep. Paul Ryan. Researchers modeled the impact of such a program tied to the current cost of Medicare, with future cost increases pegged to the growth of the nation's gross domestic product or, in an alternative scenario, the consumer price index.

"Each of the policies we examined would require sacrifices in eligibility and in higher costs imposed on Medicare enrollees," Eibner said. "As policymakers look for ways to curb the growth of Medicare spending, they must weigh the costs and benefits of the many alternatives."

Source: Eurekalert
Advertisement

Advertisement
News A-Z
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
News Category
What's New on Medindia
Link between Dietary Intake of Plant-based Essential Fatty Acids and Death Risk
Aspirin may be Harmful When Used for Preventing 1st Heart Attack, Stroke
Pregnancy Complications Elevated Among Symptomatic COVID-19 Women
View all

Medindia Newsletters Subscribe to our Free Newsletters!
Terms & Conditions and Privacy Policy.

More News on:
Diseases Related to Old Age What is Medicare / Medicaid? 

Recommended Reading
Per Capita Medicare Cost for Elderly Growing Three Times Faster in US Compared to Canada
A new study reveals that the per capita Medicare cost in the United States has grown three times ......
Medicare Cost Increasing at Its Slowest Rate Ever in Over Half a Decade, Says Standard and Poor
Standard & Poor has recently released data saying that last year US hospitals earned only one-third ...
Patient Variables Drive Medicare Costs in Last 6 Months of Life
Medicare costs at the end of life are influenced more by patient characteristics, such as ability .....
Aggressive Care Increases Medicare Costs in Advanced Dementia
A large proportion of Medicare expenditures for nursing home residents with end term dementia, a ......
Diseases Related to Old Age
Ageing is referred to the accumulation of changes that brings a person closer to death....
What is Medicare / Medicaid?
Medicaid / Medicare are different governmental programs that provide medical and health-related serv...

Disclaimer - All information and content on this site are for information and educational purposes only. The information should not be used for either diagnosis or treatment or both for any health related problem or disease. Always seek the advice of a qualified physician for medical diagnosis and treatment. Full Disclaimer

© All Rights Reserved 1997 - 2021

This site uses cookies to deliver our services. By using our site, you acknowledge that you have read and understand our Cookie Policy, Privacy Policy, and our Terms of Use