HEALTH-INSURANCE AND THE ELDERLY

The effectiveness of proposed changes to the Medicare program depends on consumers' responses to different market incentives, which vary acc ording to the coverage the elderly possess to supplement their Medicar e coverage. This DataWatch explores the extent of supplemental insuran ce among the elderly, based on a new data set from the Medicare Curren t Beneficiary Survey. Only 11 percent of Medicare beneficiaries have o nly Medicare as their source of coverage; the rest of the elderly popu lation is covered by either private coverage (employer-sponsored retir ee coverage or individually purchased coverage) or Medicaid. An increa se in Medicare cost sharing would likely affect one-third of elderly b eneficiaries, which calls into question the effectiveness of this appr oach to Medicare program reform.