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"Medicare Essential" Plan Would Save Billions While Simplifying Benefits, Lowering Costs

Combining Medicare's hospital, physician, and prescription drug coverage with commonly purchased private supplemental coverage into one health plan could produce national savings of $180 billion over a decade while improving care for beneficiaries, a new Health Affairs study finds.

Under the proposed plan, called "Medicare Essential," Medicare beneficiaries would have a comprehensive set of benefits, lower deductibles, and a limit on out-of-pocket spending, say study authors Karen Davis, Ph.D., director of the Roger C. Lipitz Center for Integrated Health Care at the Bloomberg School of Public Health, and Commonwealth Fund researchers Cathy Schoen and Stuart Guterman. According to estimates, Medicare Essential could be expected to save beneficiaries a total of $63 billion between 2014 and 2023, with premium and out-of-pocket costs anywhere from 17 percent to 40 percent lower than projected costs for Medicare with private supplemental coverage and a Part D prescription drug plan. The savings result from lower administrative costs and from beneficiaries' selection of high-value health care providers and hospitals that are able to provide quality care while keeping costs down.

Visit to read a blog post by the authors and view our infographic.

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