Equal treatment and unequal benefits: the Medicare program.

This paper analyzes the distribution of Medicare benefits among elderly persons on the basis of income, race, and geographical location. It first presents available statistical evidence from Medicare on the distribution of benefits and the magnitude of differentials among these elderly. It then sorts out the contribution to differentials arising from differences in the availability of medical resources. prices of medical services, and other demographic factors. The importance of various Medicare program features on remaining differentials--such as the cost-sharing provisions of Medicare, reimbursement policies, and nondiscrimination enforcement procedures--are then investigated. The effect of health status on utilization of medical services by the elderly is also analyzed, and the distribution of Medicare benefits by income for elderly persons of similar health status is presented. The paper concludes with recommendations for reducing differentials in Medicare benefits and indicates those policy changes which would result in a distribution of benefits more closely related to health care needs of the elderly.