Acute Health Care Costs for the Aged Medicare Population: Overview and Policy Options

Despite its seeming largesse, Medicare has always been a cost-sharing program. The potential costs borne by beneficiaries can be substantial, leading to more than 70 percent seeking protection through supplementary private insurance. Others risk payment out of pocket, and fewer rely on Medicaid. Actual costs incurred by each group of Medicare beneficiaries are examined and seen to have significant and inequitable impacts. Current Medicare policies are often poorly designed or irrelevant. Future responses will have to address both taxation and copayment while weighing concerns for individual financial hardship against possible overuse of services.