The three most widely discussed strategies to stymie rising Medicare costs — adding a Part A premium, converting the program to a private voucher system and raising the eligibility age to 67 — could be effective, but they could also discourage many from enrolling in the program at all, according to a study by RAND Health.
The most cost-saving move of the three options would be the voucher program, cutting total Medicare spending by an estimated 24 percent if the premium subsidies for private coverage were tied to the consumer price index, the authors note, citing findings published in the May issue of the journal Health Affairs. Implementing a means-tested premium for Part A would cut spending by 2.4 percent, and raising the eligibility age could reduce spending by 7.2 percent.
At the same time, researchers predict the moves would reduce enrollment rates of eligible seniors: The age-raise would cause a 14 percent drop in the number of people enrolled, the voucher model could cause between 4 percent and 13 percent to opt out and requiring inpatient premiums would discourage 2 percent from enrolling, according to the report.
Reducing Medicare spending by also reducing the number of insured seniors could put a heavy burden on hospital emergency departments and population health initiatives. However, without cost-cutting reforms, Medicare is projected to take up 24 percent of federal spending and 6 percent of the nation's gross domestic product by 2037.
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The most cost-saving move of the three options would be the voucher program, cutting total Medicare spending by an estimated 24 percent if the premium subsidies for private coverage were tied to the consumer price index, the authors note, citing findings published in the May issue of the journal Health Affairs. Implementing a means-tested premium for Part A would cut spending by 2.4 percent, and raising the eligibility age could reduce spending by 7.2 percent.
At the same time, researchers predict the moves would reduce enrollment rates of eligible seniors: The age-raise would cause a 14 percent drop in the number of people enrolled, the voucher model could cause between 4 percent and 13 percent to opt out and requiring inpatient premiums would discourage 2 percent from enrolling, according to the report.
Reducing Medicare spending by also reducing the number of insured seniors could put a heavy burden on hospital emergency departments and population health initiatives. However, without cost-cutting reforms, Medicare is projected to take up 24 percent of federal spending and 6 percent of the nation's gross domestic product by 2037.
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