ABSTRACT
Cost-containment efforts affect beneficiaries directly by raising what they are required to pay and indirectly through requirements on hospitals, doctors, and other healthcare providers. This chapter discusses the minor changes in beneficiary cost sharing. It then examines indirect changes in beneficiary burden from the implementation of prospective payment system on hospitals, a major issue, and focuses on the quality of care. The largest Medicare cuts in the first budget that was passed during the Reagan administration occurred in beneficiary cost sharing. That budget reconciliation act raised the deductible amounts for both parts of Medicare. The Medicare physician payment reform legislation was intended to be “budget neutral” in terms of physician reimbursement, meaning that the increases in fees established for some physicians are offset by decreases for others. Consequently, the impact across all beneficiaries should also be budget neutral for the basic fee schedule, although there will be individual gainers and losers.
