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Urban Institute opposes Medicare shutout of younger seniors

NEWS IN BRIEF — Posted March 18, 2013

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Reforming Medicare benefits does not need to include removing 65- and 66-year-olds from the entitlement program completely, according to a March report on Medicare and federal deficits from the Urban Institute.

In reviewing proposals in Washington to raise the Medicare eligibility age to 67, the report recommended a package of policy options under this scenario that would allow seniors ages 65 and 66 to buy into Medicare. The package contains provisions that would assist low-income individuals to ensure access to coverage, but it also calls for more means testing that would increase premiums and deductibles for middle- and higher-income earners and cap out-of-pocket spending for beneficiaries. The plan would repeal the Medicare sustainable growth rate formula and achieve a projected $600 billion in savings over 10 years.

“Medicare does not need to be rebuilt,” said Stephen Zuckerman, PhD, a senior fellow with the Urban Institute and co-director of its health policy center. “Budgetary savings can be achieved as long as beneficiaries, providers and general taxpayers share the costs.”

The Urban Institute framework would yield $734 billion in new revenues and savings, authors said. The plan includes a 0.5% payroll tax increase beginning in 2017 and reductions in pay to clinical laboratory services, skilled nursing homes, home health services and Medicare Advantage plans. Repealing the SGR would cost the program $138 billion.

The report, “Can Medicare Be Preserved While Reducing the Deficit? Timely Analysis of Immediate Health Policy Issues,” is available online (link).

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