Means-testing in Medicare

Health Affairs

Volumn 23, Issue SUPPL. 2, 2004, Pages

  Pauly, Mark V ^a  

^a UNIVERSITY OF PENNSYLVANIA   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

FINANCIAL MANAGEMENT; HEALTH CARE COST; HEALTH CARE POLICY; HEALTH INSURANCE; MEDICARE; REVIEW; TECHNOLOGY;

EID: 17144405998     PISSN: 02782715     EISSN: None     Source Type: Journal    
DOI: 10.1377/hlthaff.W4.546     Document Type: Review

References (18)

1. Boards of Trustees, Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, 2004 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, 23 March 2004, cms.hhs.gov/publications/trusteesreport/2004/tr.pdf (1 November 2004).
2. J. O'Sullivan et al., "Overview of the Medicare Prescription Drug and Reform Conference Agreement, H.R. 1," Congressional Research Service Report for Congress, 4 December 2003, www.ahcahp.org/bppo/Best%20Practices/crs%/ 20summary%20of%20act.pdf (1 November 2004).
3. P. Barry, "The New Medicare - and You," AARP Bulletin Online, January 2004, www.aarp.org/bulletin/medicare/Artides/a2003-12-24-newmedicare. html (1 November 2004).
4. Centrist Policy Network, "Kerry Talks Social Security," 19 April 2004, www.centristpolicynetwork.org/archives/000071.html (1 November 2004).
5. Computed from Boards of Trustees, 2004 Annual Report, Table II-A-3.
6. The growth in total GDP is about one percentage point higher than the per capita rate because of population growth.
7. U.S. Department of Labor, Bureau of Labor Statistics, Office of Productivity and Technology, "Comparative Real Domestic Products per Capita and per Employed Person, Fourteen Countries, 1960-2002," Table 6, 29 July 2003, www.bls.gov/fls/flsgdp.pdf (1 November 2004).
8. Boards of Trustees, 2004 Annual Report.
9. The effect of changes in the taxation of Social Security benefits on changes in the estate tax bears on this question. The presence of uncertainty about one's own future and future government rules, imperfect knowledge, and imperfect capital markets all suggest that a change in the way benefits are related to income is likely to have a smaller effect on work effort than would an equivalent change in working-life tax rates. See P. Diamond, Taxation, Incomplete Markets, and Social Security (Cambridge, Mass.: MIT Press, 2003).
10. I am indebted to Kent Smetters for this point.
11. M. McClellan and J. Skinner, "The Incidence of Medicare," NBER Working Paper no. 6013 (Cambridge, Mass.: National Bureau of Economic Research, April 1997).
12. The point that the adverse prospects for Medicare's future do not arise primarily from the aging of the population has been made forcefully in U. Reinhardt, "Does the Aging of the Population Really Drive the Demand for Medicare?" Health Affairs 22, no. 6 (2003): 27-39.
13. For a more extensive discussion, see M. Pauly, "What If Technology Never Stops Improving? Medicare's Future under Continuous Cost Increases," Washington and Lee Law Review 60, no. 4 (2003): 1233-1250.
14. If Part D costs are added to those estimated here, the Medicare 2035 GDP percentage under the growth assumption of GDP plus 1 percent would be 7.8 percent rather than the 6.0 percent shown here. See Boards of Trustees, 2004 Annual Report, Table II-A-2. This estimate uses a slightly higher assumed rate of real GDP growth than the 1.1 percent embodied in the most recent long-run projections.
15. This calculation adds to the 2.9 percent Part A tax an additional 40 percent to reflect funding for Part B as an equivalent payroll tax.
16. J.P. Smith, "Wealth Inequality among Older Americans," Journals of Gerontology, Series B: Psychological Sciences and Social Sciences 52, Special Issue (1997): 74-81.
17. T.R. Marmor and J.L. Mashaw, "The Case for Universal Social Insurance," in Policies for an Aging Society, ed. S.H. Altman et al. (Baltimore: Johns Hopkins University Press, 2002), 169-198.
18. H. Jenkins, "Too Bad He Couldn't Find a Veep Named Gridlock," Wall Street Journal, 7 July 2004.