Citation URL: http://www.urban.org/MarilynMoon

For some, Medicare is a model of what national health insurance could be in the United States. Despite its low administrative costs and significant contributions to the well-being of America’s oldest and most disabled citizens, some critics assail the program as being out of sync with the needs of many senior citizens, while others often refer to it as “unsustainable” because of its high costs. Physicians and hospital administrators endlessly criticize and debate Medicare, but rely upon it for a substantial share of their revenues. In Medicare: A Policy Primer, Marilyn Moon explains what Medicare is, how it works, and where is it headed. She examines the problems facing the program and which reform options hold the most promise. She also examines the history of Medicare and how the program works in the broader context of health care, the federal government, and the economy. It is a clear introduction to one of the most critical debates in health policy and an important volume for anyone interested in the future of Medicare.

Senior fellow Marilyn Moon testifies before the Senate Finance Committee on the important question of how to improve the Medicare program.

As Medicare beneficiaries double over the next 30 years, controlling per enrollee spending growth becomes increasingly more important. Cost containment, therefore, is a major feature of most Medicare reform discussions. When assessing private and public approaches, a careful comparison of spending growth between Medicare and private insurers can shed light on which sector is better able to control per enrollee spending in the long run. This research note discusses some recent relevant studies and the important data limitations of this type of analysis.

[United Press International] The President's Medicare reform proposal allowing choice of benefits through private plans may work for the healthy and wealthy, but not for the vast majority of Medicare beneficiaries.

Senior fellow Marilyn Moon testifies before the Joint Economic Committee on future financing issues of Medicare as it absorbs the coming rapid increase in the number of individuals becoming eligible, along with a likely increase in the costs of services.

Senior fellow Marilyn Moon testifies before the Health Subcommittee of the House Committee on Energy and Commerce on the long-term financing challenges facing Medicare and the broader issue of affordability in thinking about Medicare's future.

Over the past three decades both Medicare and private insurers have initiated cost containment mechanisms to control the growth of spending on personal health care. To compare spending growth between these two payers, we present four measurement principles that should be implemented when drawing such comparisons, and we apply them to the National Health Accounts data files. We attribute Medicare's ability to equal--and using our measures, actually exceed—the private sector in controlling the rate of health spending growth to Medicare's ability to price aggressively for the services it covers. (Health Affairs, March/April 2003; 22(2): 230-237). [view the corresponding press release.]

Most Americans facing death are Medicare beneficiaries, yet Medicare's hospice benefit, which provides coverage for palliative care services, is a relatively small program, serving only 20 percent of beneficiaries. Using the Medicare Current Beneficiary Survey, we found that non-whites, low-income individuals, and nursing home residents are less likely than their counterparts to choose hospice care. Drug coverage, insurance status, and treatment protocols can influence an individual's decision to choose hospice care. Some modest changes to the current Medicare program, such as hospice eligibility and improved physician training in palliative care can improve end-of-life care received by dying Medicare beneficiaries.

This concept paper extends and develops an idea for an alternative methodology Medicare might use to determine capitation payments to health plans that participate in the Medicare+Choice program. The Direct Payment Method, first suggested by Greenwald et al. (1998), would shift the basis of payment away from the current approach, which builds on county-based Medicare fee-for-service (FFS) expenditures, to a national model that predicts expenditures for individual Medicare enrollees. Ideally, the Direct Payment Method would use detailed encounter data for Medicare+Choice enrollees, information on the cost of the services they received, and a health-based risk adjuster to predict expenditures for individual enrollees. When combined with geographic adjustments for input prices and local market conditions, the resulting payment would be independent of the extreme and highly problematic geographic variations in Medicare's FFS payments per enrollee.

This policy brief considers how to structure a Medicare prescription drug benefit and what trade-offs will need to be made in the context of financial limitations. It discusses three potential approaches, each of which employs a different cost/payment structure and benefits one group while neglecting another. Nonetheless, it suggests that it is possible to craft a drug benefit that would preserve universal coverage by protecting low-income beneficiaries and placing a cap on high costs. [View press release]

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