Policy Options to Expand Medicare's Low-Income Provisions to Improve Access and Affordability

Published in: Health Affairs, v. 34, no. 12, Dec. 2015, p. 2086-2094

Posted on RAND.org on December 10, 2015

by Cathy Schoen, Christine Buttorff, Martin S. Andersen, Karen Davis

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For fifty years Medicare has enhanced the health and financial security of seniors. Yet in 2014 an estimated 40 percent of low-income beneficiaries spent 20 percent or more of their incomes on out-of-pocket expenditures for premiums and medical care, while one-third were underinsured based on their out-of-pocket spending for medical care alone. These high burdens reflect Medicare's limited benefits and restrictive income eligibility levels for supplemental Medicaid coverage. We examined the impacts of illustrative policies designed to improve beneficiaries' financial protection and access to care by reducing Medicare premiums and cost sharing for covered benefits on a sliding scale for all beneficiaries with incomes up to 200 percent of the federal poverty level. We estimate that these policies could improve the affordability of health care for eleven million people. Designed to be aligned with the Affordable Care Act's subsidy approach for the population younger than age sixty-five, these policies also have the potential to smooth transitions into Medicare, reduce administrative costs, and provide a more secure and equitable foundation for Medicare's future.

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