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

Abstract

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

Garrett, A. Bowen and Gangopadhyaya, Anuj and Shartzer, Adele and Arnos, Diane, A Unified Cost-Sharing Design for Medicare: Effects on Beneficiary and Program Spending (July 22, 2019). U.S. Health Reform—Monitoring and Impact July 2019, Available at SSRN: https://ssrn.com/abstract=3431362 or http://dx.doi.org/10.2139/ssrn.3431362

A. Bowen Garrett (Contact Author)

Urban Institute ( email )

500 L'Enfant Plaza SW
Washington, DC 20024
United States

HOME PAGE: http://www.urban.org/BowenGarrett

Anuj Gangopadhyaya

Urban Institute ( email )

2100 M Street, NW
Washington, DC 20037
United States

Adele Shartzer

Independent ( email )

Diane Arnos

The Urban Institute ( email )

2100 M Street, NW
Washington, DC 20037
United States

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