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National Survey of Public Knowledge of the Medicare Program and Public Support for Medicare Policy Proposals

New Survey finds most Americans oppose slowing the growth of Medicare to balance the budget or cut taxes, but would support changes to avoid bankruptcy

Embargoed for release until: 9:30 AM EST Thursday, June 29, 1995

Contacts: Matt James Tina Hoff (415) 854-9400

–Public Favors Incremental Rather than Sweeping Reforms–

–Significant Generational Differences on Medicare Reform–

Washington, D.C. — A new survey has found that close to three out of four Americans (73%) support reducing the rate of growth in Medicare spending if the goal of the reductions is to avoid the bankruptcy of the Medicare program. However, less than half the public supports major reductions in Medicare spending growth if the goal is to balance the Federal budget (44%) or provide a tax cut (28%).

The Kaiser/Harvard/Harris Survey on Medicare also found that most Americans (70%) know that the Medicare program is in danger of going bankrupt, and many (48%) express a high level of concern over that possibility. Nearly half (49%) say they are aware that Medicare “has been going bankrupt” for a long time.

Redesigning Medicare

The survey also found that while most Americans support Medicare changes to ensure the fiscal solvency of the program, most are leery of a major redesign of the program. A plurality of the public, 45%, support Congress making changes in the Medicare program as long as the changes still “preserve Medicare basically as it is.” Two out of five adults (40%) support a complete redesign of the program, and a minority (14%) say Medicare should be left as it is. When given a choice between the current system, in which you get a Medicare policy directly from the government, and the option of receiving a voucher to purchase private insurance, the public supports the current system (65%) over a voucher (32%). The public is evenly split (49% favoring, 48% against) on the idea of enrolling “most” Medicare beneficiaries in Medicare managed care. But, 72% favor government incentives to enroll in managed care, and 55% favor raising premiums for those who stay in fee-for-service.

“Just as in health reform, the American people are leery of sweeping change, and generally opt for more modest incremental reforms. Medicare is no exception,” said Drew E. Altman, president of the Kaiser Family Foundation.

Support for specific program changes

Among policy changes the public most strongly supports to avoid Medicare bankruptcy:

  • Having those over 65 whose incomes exceed $70,000 per year pay a higher Medicare premium than other seniors (78%);
  • Having the government provide incentives to recipients to join less expensive managed care plans (72%);
  • Reducing Medicare payments to physicians and hospitals by 15% (68%);
  • Paying more in taxes or premiums (62%).

The policy options with the weakest public support to avoid Medicare bankruptcy:

  • Reducing Medicare benefits (16%);
  • Raising out-of-pocket payments of Medicare recipients (20%);
  • Raising payroll taxes (32%).

The perceived purpose behind slowing the growth of Medicare spending makes a big difference in the public’s willingness to see Medicare recipients pay more. When the purpose is to keep Medicare from going bankrupt and avoid raising taxes, a majority (54%) of Americans are willing to have Medicare beneficiaries pay higher premiums and copayments. But when the purpose is to balance the Federal budget and avoid raising taxes, only 35% are willing to see beneficiaries pay more. The public is not willing, however, to support the government raising payroll taxes either to avoid bankruptcy (32% support), or to balance the budget (25% support).

“The public appears to be willing to support efforts to solve the bankruptcy problem, but they do not want Congress to use Medicare savings to balance the budget or cut taxes,” said Robert J. Blendon, professor of health policy at Harvard University and director of the Kaiser-Harvard Program on the Public and Health/Social Policy.

Looking toward the Future

When asked what the Medicare program should look like in the year 2000, a substantial majority (60%) prefer to leave Medicare as it is today, with a fixed set of benefits and the government providing individuals with a single insurance card, while only 35% see Medicare as we know it no longer existing and being replaced by a voucher program.

More Americans would like to see Medicare remain a program that is run by the Federal government (58%) than turned over to private insurance companies for them to run (35%).

The public is divided on the issue of how much coverage should be provided by Medicare in the future if higher taxes are required. Although a plurality (42%) of Americans would accept more limited coverage under Medicare rather than pay higher taxes, 24% would pay higher taxes to preserve the current level of coverage and 28% would pay even higher taxes to provide additional benefits. A plurality (42%) of Americans think Medicare benefits should go to all retirees, but higher income retirees should pay more; but fewer than one in four (23%) would means test the program and require all those with higher incomes to buy their own health insurance. One third (34%) believe that if people have paid Medicare taxes, they are entitled to benefits when they retire no matter how well off they are.

The Medicare Generation Gap

The survey found significant differences in how people of different generations view the Medicare program. For example, support for a complete redesign of the Medicare program is higher among those under 50 (44%) than among those over 65 (23%). Over one-third of those over 65 (35%) want Congress to leave Medicare alone, while few people under 50 (8%) hold this view. Those under 50 are almost twice as likely to support turning Medicare into a voucher system (40%) as are those over 65 (22%).

When it comes to managed care, a majority of those under 50 (60%) favor encouraging the greater use of low-cost managed care plans to avoid bankruptcy and increased taxes, a position favored by less than half of those 65 and over (42%). In addition, while a majority of those under 50 (57%) favor having most Medicare beneficiaries enrolled in private managed care plans rather than traditional Medicare fee-for-service (41%), seniors by an overwhelming margin (70% to 23%) prefer having most beneficiaries remain in fee-for-service.

Although most seniors (56%) recognize that the program is in danger of bankruptcy, many are cynical about the motives of Congress in the current Medicare debate. By a two-to-one margin, seniors think that members of Congress are trying to gain political advantage from the issue (63%), rather than genuinely trying to respond to a crisis in the program (31%). By contrast, a majority (52%) of adults under the age of 50 think members of Congress are genuinely trying to respond to a crisis.

The survey also shows that, as a group, seniors are politically more active on Medicare and Social Security issues than other adults.

Medicare Knowledge

Most Americans blame rising Medicare costs on:

  • excessive charges by doctors, hospitals, and other health providers (80% say this is a very important cause for rising costs);
  • poor management by the government (70%), and fraud and abuse by doctors;
  • hospitals (68%).

Reasons often cited by Medicare experts for rising costs appear less important to the public, such as the increased number of retirees (50%)and new drugs, tests and treatments for the elderly (31%).

Most Americans (77%) are aware that Medicare is primarily a Federal government, rather than a state or private program; that the current Medicare program pays for doctor bills for individuals age 65 and older (75%); and, that Medicare is a program that principally serves the elderly (74%).

But the public is poorly informed about what Medicare covers. Fewer than half are aware that Medicare does not pay for long-term nursing home care (49%) or for prescription drugs (41%).

Public understanding of the current debate over the future of Medicare may be hampered by misconceptions about how large a share of the Federal budget is devoted to Medicare. Asked to choose among five items on a list (defense was excluded), the public ranked foreign aid and food stamps as the two largest items in the federal budget (picked by 63% and 42%, respectively). By contrast, the two items on the list that do actually constitute the largest areas of non-defense spending — Social Security and Medicare — were cited by 33% and 32% of respondents.


Methodology

The Kaiser/Harvard/Harris Survey was conducted by telephone with 1,383 adults nationwide between May 31 and June 5, 1995. The sample consisted of 1,076 adults selected randomly, plus an oversample of 307 people 65 years of age and older. Altogether 548 people 65 and older were interviewed, and their responses were weighted to the group’s proper proportion among the national adult population. The survey was designed by the Kaiser Family Foundation and the Harvard School of Public Health’s Department of Health Policy and Management and was conducted by Louis Harris and Associates, Inc. The margin of error in the national sample is plus or minus 3 percent. The survey is the latest conducted under the Kaiser-Harvard Program on the Public and Health/Social Policy, designed to monitor public knowledge, values, and beliefs on health and health-related issues.

The Kaiser Family Foundation, based in Menlo Park, California, is a non-profit, independent national health care philanthropy and is not associated with Kaiser Permanente or Kaiser Industries. The Foundation’s work is focused on four main areas: health policy, reproductive health, HIV, and health and development in South Africa.

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Filling the need for trusted information on national health issues, the Kaiser Family Foundation is a nonprofit organization based in Menlo Park, California.