Can Private Savings Incentives Ease the Burden of Medicare Out-of-Pocket Costs?

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<p>Medicare beneficiaries can have significant out-of-pocket costs, particularly if they lack supplemental coverage. These costs disproportionately affect elderly, low-income, and chronically ill beneficiaries.<br><br>In the new Commonwealth Fund report, <a href="/publications/fund-reports/2008/mar/medicare-out-of-pocket-costs--can-private-savings-incentives-solve-the-problem
">Medicare Out-of-Pocket Costs: Can Private Savings Incentives Solve the Problem?</a>, Eliot Fishman, Ph.D., Suzanne Tamang, M.S., and Dennis Shea, Ph.D., examine whether incentives for private savings could relieve the burden of post-retirement health care costs, especially for low-income individuals. Although low-income seniors have lower medical costs on average than other seniors, these costs account for a far greater percent of their annual income.<br><br>Recent policy proposals have centered on tax incentives for saving during working-age years, including health savings accounts and subsidized or tax-advantaged long-term care insurance. While private savings may seem to be the most realistic path for addressing the growing problem of post-retirement medical expenses, the authors found that enhanced savings offer only a partial solution to this problem, especially for low-income seniors.</p>