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Consensus Stirs for Medicare Reform

Margaret Dick Tocknell, for HealthLeaders Media, June 27, 2013

Wednesday's discussion was framed around several of the specific recommendations presented to the subcommittee in April by the Medicare Payment Advisory Committee, (MedPAC) but focused on these three proposals:

1.Combine Medicare Parts A and B under a unified cost-sharing structure.
Medicare has always maintained separate deductibles for Parts A and B. Initially, Medicare was modeled after private insurance, although a single deductible for all medical services is now commonplace among private plans.

But "a single combined deductible for both types of services might lessen the effects of the current structure on beneficiary incentives," says MedPac's April report to the subcommittee.

Inpatient care (Part A) carries a high deductible and because that care is not discretionary, it is less likely to be influenced by cost sharing. However, physician and outpatient care (Part B) are more discretionary and more likely to be influenced by cost sharing.

Thomas Miller of American Enterprise Institute said removing the separate deductibles for Parts A and B, and even Part D, "provides a potential policy reform tool that could achieve the twin goals of saving taxpayer dollars while improving the most essential risk protection benefits available to elderly beneficiaries." He suggested that savings could be used to provide better stop-loss protection against large catastrophic risks.

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