Can Medicare Be Preserved While Reducing the Deficit?

A new addition to the Urban Institute and Robert Wood Johnson Foundation's Quick Strike series finds that with a package of options, policy-makers can produce substantial budgetary savings, while preserving the Medicare program for current and future beneficiaries.

Key Findings:

  • Such policies would include allowing 65- and 66-year olds to buy into Medicare, but requiring them to pay more than they do today; increasing premiums and deductibles for middle- and high-income individuals, while lowering them for those with incomes below 300 percent of the federal poverty level and limiting out-of-pocket payments for everyone; and increasing the Medicare payroll tax by 0.5 percent.
  • Together these, and other policies, could provide savings and new revenues of about $734 billion for 2013-2022. Allowing the permanent repeal of the sustainable growth rate (SGR) would still provide projected savings of about $600 billion.

The authors state that there are dozens of other possible benefit and provider payment reform opportunities that could be pursued, stressing that the real takeaway is that there are viable options that should be explored. 

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