Description
- Abstract:
- Traditional Medicare’s (TM) lack of an out-of-pocket maximum, a feature of Medicare Advantage plans, means that OOP costs can accumulate rapidly for beneficiaries without supplemental coverage. To increase affordability for TM beneficiaries, Congress could establish an out-of-pocket maximum. We used data from the 2022 CMS Master Beneficiary Summary File and performed a simple analysis of the share of non-dual TM beneficiary spending over various OOP caps of Parts A and B spending. The analysis assumed no impact of the cap on beneficiaries’ choice of supplemental plans and assumed no impact on utilization patterns. From this analysis, we estimate that a $1,000 out-of-pocket cap on Parts A and B spending would benefit 44% of non-dual TM beneficiaries and cost $44 billion in 2025, whereas a $10,000 cap would benefit 3.1% of beneficiaries and cost $8 billion. An out-of-pocket maximum on Part A and B spending greater than $4,000, would benefit less than 10% of qualified beneficiaries and cost between $8-19 billion in 2025. While our analysis gives a ballpark estimate of the costs of OOP caps for Parts A and B, a more detailed analysis should account for likely behavioral effects of OOP caps on beneficiaries’ plan choice or utilization patterns.
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Citation
Meehir Dixit, David Meyers, and Andrew Ryan,
"Estimating the Cost of an Out-of-Pocket Maximum in Traditional Medicare"
(2024).
Center for Advancing Health Policy through Research (CAHPR) Digital Collection.
Brown Digital Repository. Brown University Library.
https://doi.org/10.26300/kb5e-n559
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Center for Advancing Health Policy through Research (CAHPR) Digital Collection
This collection contains research outputs produced by members of the Center for Advancing Health Policy through Research (CAHPR). Collection DOI: https://doi.org/10.26300/mshb-sp27...