Means-Testing In Medicare
- 1 January 2004
- journal article
- Published by Health Affairs (Project Hope) in Health Affairs
- Vol. 23 (6) , W4-546
- https://doi.org/10.1377/hlthaff.w4.546
Abstract
The Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003 introduces means-testing of premiums and benefits in two ways. It will means-test the Part B premium, setting higher premiums for better-off seniors. More importantly, it will offer much more generous drug benefits, at low or zero premiums, to lower-income beneficiaries. This paper argues that additional means-testing could improve Medicare's financial picture. It proposes a strategy in which future Medicare beneficiaries with higher incomes will pay for cost-increasing but quality-improving new technology, possibly with prefunding that begins before retirement.Keywords
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