Providing behavioral incentives for improved health in aging and Medicare cost control: a policy proposal for Universal Medical Savings Accounts.

This paper examines policy options for addressing health care challenges posed by the aging of the baby boom generation. Universal Medical Savings Accounts (UMSAs) are proposed. UMSAs are defined-contribution vouchers coupled with medical savings accounts. The proposal includes significant equity protections for those with low income/wealth, including balance billing limits and stop-loss protections, together with subsidies for risk-adjustment. The policy would control costs while promoting quality, accessible, and affordable health care. UMSAs provide new behavioral incentives, both for cost-conscious health care decision-making and for healthy lifestyle choices.