The Center for Health and Economy (H&E) will soon employ a Medicare microsimulation model to predict how plan choices and expenses for seniors are affected by Medicare and Medicare Advantage policy changes. The model will be capable of assessing the plan choices of Medicare beneficiaries, and the associated costs to the federal budget. Using these criteria, H&E will be able to project the outlook of health care for American seniors under current law as well as alternative scenarios.
The microsimulation model will employ individual level data on Medicare beneficiaries maintained by the Center for Medicare and Medicaid Services (CMS) in the Standard Analytical Files to estimate plan choices of seniors. The details of Medicare Advantage and Part D plans characteristics are also published by CMS, allowing us to estimate the typical premiums, available benefits, and the effects of plan competition in county in our data. In order to make accurate predictions, the model will use projections on population aging conducted by the CMS Office of the Actuary.
The benefit of this project is that H&E will be able to estimate individual level plan choice probabilities based on premiums, coinsurance, and personal characteristics. As we currently do for our under 65 microsimulation model, we will account for the effect of health policy on taxes, subsidies, plan availability, etc., and analyze the impact of current and proposed legislation.