Restructuring Medicare

To reduce federal spending, advance entitlement reform, and simplify benefits, policy makers have proposed redesigning Medicare cost sharing.

Policy-makers in Washington have been debating the role that entitlement programs such as Medicare should play in reducing federal deficits. Proposals to restructure Medicare’s benefit design have been suggested as a means to reduce Medicare spending by the federal government.

Some policy-makers have recommended redesigning the program to protect beneficiaries from high out-of-pocket spending, better align incentives to reduce overuse of services, and potentially lower costs for the federal government. Opponents of such reform efforts fear that, in trying to reduce federal spending, reforms will shift costs onto beneficiaries and could make them less likely to seek needed care.

This brief explores the options that have been discussed for redesigning Medicare cost-sharing and the potential impact on beneficiaries.