Potential Effects of National Health Insurance Proposals on Medicare Beneficiaries
HRD-76-129: Published: Feb 24, 1977. Publicly Released: Feb 24, 1977.
- Full Report:
Medicare was established to protect the elderly against the costs of inpatient hospital care. The proposed Comprehensive Health Insurance Act of 1974 (CHIP) would combine parts A and B of Medicare and would modify Medicare's cost-sharing formulas and limit beneficiaries' liability based on income. The proposed National Health Insurance Act of 1974 (Kennedy-Mills proposal) would leave the Medicare cost-sharing formula essentially the same but would limit the beneficiaries' liability based on income. The proposed Catastrophic Health Insurance and Medical Assistance Reform Act (Long-Ribicoff proposal) would, essentially, supplement Medicare's existing benefits by covering catastrophic illnesses. Both the CHIP and the Kennedy-Mills proposal would use credit cards (program payments would be made in full to participating providers, such as hospitals, on behalf of beneficiaries).
Of the various proposals, eliminating the limits on inpatient hospital days and substituting a flat, daily coinsurance charge for the existing inpatient deductible and coinsurance seem most attractive, since they would simplify administration. Introducing a modified benefit structure based on individual or family income would greatly increase costs, particularly if strictly enforced and monitored to maintain the integrity of the system, and could have only a limited impact on total program benefits. Introducing a credit card system would simplify administration and reduce costs for providers, but would increase administrative costs to the government.
Matter for Congressional Consideration
Comments: Please call 202/512-6100 for additional information.
Matter: The Social Security Administration should test the feasibility and utility of a credit card system in a national health insurance scheme. Congress should explore whether the benefits of an income test would justify the resultant added administrative problems and costs. If cost sharing for inpatient services is desirable, Congress should provide for a fixed, daily copayment.