Department of Health and Human Services

Medicare Deductible can be graduated, based on age

Recently retired folks tend to have larger pensions since they are based on more recent (therefore larger) salaries. They can therefore afford larger deductibles for medical care. As one gets older, the available funds become tighter as the 'fixed income' issue becomes more serious and inflation reduces the value of ones savings. Smaller deductibles are more important for this group. One size never has fit all, and should not be applied in this case.


I therefore propose that the Medicare deductible which must be paid out-of-pocket, before coverage kicks in, be age-based. It can start out larger at 65, gradually decreasing up to some smaller value at, say, 75. It would then stay at that smaller value.


This approach would result in recently retired (and probably healthier) folks being responsible for a greater initial expense for their health care, while older folks have a smaller burden to bear before the coverage kicks in. Since their income and remaining nest egg are smaller, this will be of greater value to the older group. It also addresses the fear of being unable to pay as one gets older.


A similar approach could be applied to any co-pays that are required. Although administering that at check-out from the doctor's office might be problematic. Still, doctor's offices already deal with a range of insurance co-pays, so this wouldn't really be a change.


This graduated approach to Medicare deductibles could be politically acceptible while saving a lot in future health care expense. It avoids an income-based 'needs test', using age as a proxy for likely fixed income and health care needs.



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Idea No. 15017