A Congressional Budget Office review shows that first- dollar Medigap coverage costs billions of dollars. These dramatic savings demonstrate the powerful destructive force of first-dollar coverage on cost containment. Limiting the ability of Medigap insurers to provide low deductible policies could serve as a starting point toward self-insurance for Medicare. A nationally known accounting firm is currently preparing a study of the impact of offering Medicare participants a greater range of choice in health care delivery, including Medical Savings Accounts and HMOs. Below is a summary of the findings of the draft report.
All figures are in billions of dollars.
Means testing the vouchers and Part B premiums would be politically difficult, and the savings do not depend on these means tests. Even MSA participation rates as low as 50 percent would yield significant savings in the Medicare program. It bears repeating that these results are predictions only, as there is no experience by which to judge the behavior of senior citizens enrolled in Medical Savings Accounts. Expanding access to Medical Savings Accounts is the most viable option. As a component of many alternative health care bills last year, MSAs had broad support from a number of constituencies and both sides of the aisle.