April 6, 2013


Common Ground on Medicare Emerges (LOUISE RADNOFSKY and JANET HOOK, 4/06/13, WSJ)

Payroll-tax revenue covers most of the cost of Part A hospital care. The coverage has a $1,184 annual deductible for care, but beneficiaries don't have to pay further cost-sharing on the first 60 days of a hospital stay. Copayment charges increase sharply after that.

The majority of beneficiaries also sign up for Part B coverage of doctor bills, with basic premiums set at $104.90 a month, and a $147 annual deductible and 20% cost-sharing. There are no caps on the amount that they pay out of pocket.

A deficit-reduction panel chaired by Republican Alan Simpson and Democrat Erskine Bowles recommended in late 2010 that the deductibles be combined into a single $550 deductible, with seniors asked to contribute 20% toward the cost of hospital and doctor care until they reach a cap.

Under the cap, beneficiaries would pay a much smaller share after the first $5,500 of costs and no more than $7,500 out of pocket in total.

The combined effect of the changes, the panel predicted, could save the U.S. $10 billion in 2015 and $110 billion through 2020.

That would help seniors who get very sick, but the savings would come because the majority of seniors would pay more out of pocket.

Which would also mean they'd consume it less.
Posted by at April 6, 2013 6:48 PM

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