Making Medicare’s Cost-Sharing More Affordable


High hospital deductibles and exposure to other out-of-pocket costs have long been recognized as a shortcoming in Medicare’s benefit design. Traditional Medicare’s lack of adequate financial protections also makes it difficult to open the program to people under age 65, as some politicians have proposed.

In a new Commonwealth Fund report, Cathy Schoen, Karen Davis, Christine Buttorff, and Amber Willink offer a way to limit beneficiaries’ costs for traditional Medicare’s core services and reduce the need for supplemental Medigap coverage. The researchers propose capping annual out-of-pocket expenses for Parts A and B benefits at $3,500 and replacing Part A hospital cost-sharing with a $350 or $100 copayment per admission. These reforms, they say, would not only make traditional Medicare more affordable, it would put the program on a more equal footing with private Medicare Advantage plans, which are required to cap enrollee out-of-pocket expenses.

Read the report to learn more about this reform option, including how it could be financed, how it could stimulate competition in the Medicare Advantage market, and why it would make proposals to offer Medicare to Americans under 65 more feasible.

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