Executive Summary

Meeting the congressional budget goals without any loss of benefits. The Republican plan can save $273 billion over the next seven years without any loss of health coverage.

• A voucher plan allowing the elderly to obtain Medical Savings Accounts and catastrophic health insurance will save as much as $195 billion.

• Extending the program to the disabled and making other minor program changes account for the remaining savings.

• Without any managed care, private insurers could put about $1,500 into a Medical Savings Account for each beneficiary and could pay for all expenses above $3,000.

• With managed care, private insurers could put about $2,100 in a Medical Savings Account and pay all medical bills above $3,000.

• Under the current system, the elderly can pay thousands of dollars in health bills.

• For example, more than 418,000 Medicare beneficiaries pay more than $5,000 out of pocket every year.

• Under the voucher plan, the out-of-pocket expenses would be limited.

• Under the current system, if a patient does something to eliminate waste, the benefit of that action goes to the government.

• With Medical Savings Accounts, people get to keep any money that remains in their accounts at the end of each year.

• Therefore, Medicare beneficiaries can receive up to $2,100 a year in cash.

Coverage for prescription drugs and other services. For no extra premium, beneficiaries can have coverage for services not currently covered by Medicare.

• Under the current system, Medicare does not cover most costs of prescription drugs - leaving the elderly at risk for limitless out-of-pocket expenses.

• The voucher plan would allow private insurers to extend coverage to drugs and other items.

• For example, instead of a $2,100 MSA deposit, people could have drug coverage above their deductible with a Medical Savings Account deposit of about $1,500.