Seniors paying higher Medicare premiums, deductibles may rein in costs, experts say

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Giving seniors responsibility for a greater share of their own healthcare bills could help keep Medicare spending under control, a new study from the National Center for Policy Analysis suggests.

The report offers four ways to reform the Medicare program that would constrain taxpayer burden and make beneficiaries “increasingly more responsible for funding their retirement healthcare expenditures.” Those options, released Monday, include:

  • Increasing beneficiary premiums to cover rising Medicare costs

  • Raising beneficiaries' deductibles and copays to limit the burden on taxpayers

  • Introducing a combination of traditional Medicare and private insurance, in which the Centers for Medicare & Medicaid Services reimburses beneficiaries directly and beneficiaries are free to obtain care anywhere

  • Retirees purchasing health insurance privately, with a combination of their own resources and support payments from CMS. This option is the “most extreme departure from traditional Medicare,” researchers note.

“As illustrated by our analysis of lifetime benefits, taxes, and premiums, the current financing arrangement distributes much of the program's financing burden on higher-earning workers and on subsequent generations,” the study's authors wrote. “The program's generational equity can be improved if future beneficiaries — current workers — prepay some of their retirement healthcare through new savings options.”

Click here to see the full NCPA study.