Medicare Means Testing: Test the Deductible, Not the Premium

Outside the Administration, few politicians are serious about addressing the impending bankruptcy of Medicare, and some are even hastening it along. While the President has been unable to execute fundamental reforms to Medicare, he has taken marginal, but substantive, steps to improve the incentives and “bend the curve” of rising costs. One promising reform is an income-based means test for Part B and Part D benefits; but the premium is likely not the right place to apply the test, whereas applying the means test to the deductible would have a positive impact on both patients’ and suppliers’ behavior.

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