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A Unified Cost-Sharing Design for Medicare: Effects on Beneficiary and Program Spending

07.2019 / By Urban Institute

This report examines a potential reform to Medicare that would simplify coverage for fee-for-service beneficiaries; streamline cost-sharing obligations under a uniform deductible for Medicare Parts A, B, and D services; and create an out-of-pocket maximum to protect beneficiaries from high financial burdens.

The potential impacts of the unified cost-sharing policy on beneficiary and program spending are assessed using MCARE-SIM, a new microsimulation model designed to estimate the effects Medicare policy reforms. Under the policy, beneficiary out-of-pocket spending would decline or remain similar for 35.1 of the 39.4 million fee-for-service Medicare beneficiaries and 4.3 million beneficiaries would experience at least a 5 percent increase in spending. Medicare spending would increase by $31.2 billion (a 5.7 percent increase) relative to current law in 2020.



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