Advancing Medicare

For five decades, Medicare has helped older adults and disabled people of all ages obtain the health care they need while protecting the most vulnerable from severe financial hardship. The Commonwealth Fund’s Advancing Medicare initiative identifies ways in which this crucial program—the largest payer of health care services in the United States—can serve its beneficiaries more effectively and efficiently while helping to foster broader health system improvements.

Medicare has enormous capacity to leverage broader change in U.S. health care. More than 50 million aged and disabled Americans access care through the program, which accounts for a large and growing share of the federal budget. Through the new Center for Medicare and Medicaid Innovation, Medicare has a key role in the development, implementation, evaluation, and spread of innovative models of health care organization, delivery, and payment—not only for Medicare, but for other federal and state health insurance programs and private payers, too.

Medicare faces some serious challenges, however. Chief among them are rising costs for both the federal budget and seniors covered by the program. The average beneficiary spends 15 percent of her income on health care, compared with just 5 percent for people under age 65. And because Medicare covers only a portion of medical expenses, most beneficiaries purchase supplementary insurance, adding to costs.

Additional challenges include the need for more-comprehensive benefits, better financial protection for beneficiaries with low or modest incomes, and a reduction in the complexity of Medicare coverage. Strategies are also needed to serve the expanding number of enrollees with complex care needs and multiple chronic conditions.

The Commonwealth Fund is studying potential solutions to these issues. Fund-supported research is examining how Medicare can:

  • Improve access to the benefits and care needed by aged and disabled beneficiaries. 
  • Lower program costs. 
  • Assess and disseminate innovations in care delivery and provider payment throughout the program and the entire health system. 
  • Improve coordination between Medicare and other public programs, like Medicaid. 
  • Work together with private insurers, particularly as the new state insurance marketplaces open for business. 

To learn more about Medicare’s evolution over the decades, the challenges it faces, and proposed options for addressing them, see our publication series Medicare at 50 Years.

Program contact: Shawn Bishop, Vice President

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Shawn Bishop
Shawn Bishop
Vice President, Controlling Health Care Costs and Advancing Medicare, The Commonwealth Fund

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