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Health Affairs, Vol 19, Issue 5, 72-83
Copyright © 2000 by Project HOPE

Journal Article

Prefunding Medicare without individual accounts

It has recently been proposed that Medicare be prefunded through the creation of individual medical retirement accounts. There is a strong case for prefunding Medicare in anticipation of the retirement of the numerous baby boomers. But the creation of individual accounts would involve a new departure for Medicare with serious potential shortcomings. This paper shows how Medicare can be prefunded without the creation of individual accounts--through a Medicare trust fund reform.

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