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Saving the Medicare System With Medical Savings Accounts

Conclusion

Substantial progress can be made toward meeting the congressional budget goal of eliminating $270 billion from projected Medicare spending without any loss of health coverage or additional costs for the elderly. As Table V shows:

  • Medical Savings Accounts for the elderly will save about $195 billion over seven years.

  • Extending the program to the disabled will add another $15 billion of savings.

  • In making these estimates, Milliman & Robertson were conservative; more realistic assumptions would add another $25 billion in savings - for a total of $235 billion.

  • Such options as means testing benefits by requiring the highest-income elderly to pay higher premiums or increasing the age of eligibility (currently 65) by one month per year would add at least $30 billion more savings.

We conclude, therefore, that solving the Medicare crisis is painless, provided that we take full advantage of the options the private sector already uses to control health care costs.


NOTE: Nothing written here should be construed as necessarily reflecting the views of the National Center for Policy Analysis or as an attempt to aid or hinder the passage of any bill before Congress.

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