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  • One More Step toward the Right Medicare and Medicaid Reforms

    The President’s National Commission on Fiscal Responsibility and Reform is not set to release its final recommendations on how best to tackle deficit spending and entitlement reform until December 1. However, several of its members have already gone public with proposals to reduce runaway spending and put Medicare and Medicaid, two of the fastest-growing entitlement programs, on the road to solvency.

    The commission co-chairs, Alan Simpson and Erskine Bowles, released a report that takes several positive steps in reforming Medicare, including opting to repeal the Sustainable Growth Formula. Alice Rivlin and Representative Paul Ryan (R–WI), also members of the commission, released transformative, long-term solutions to Medicare and Medicaid that would better serve patients and reduce the tremendous upward pressure these programs place on federal spending.

    The Rivlin–Ryan plan would maintain traditional Medicare for current beneficiaries and future beneficiaries over the age of 55. Beginning in 2021, the program would be transformed to provide a defined contribution rather than a defined health care benefit. Under this premium support system, seniors would be able to select health plans that they found best suited their needs in a new Medicare exchange. Contributions would vary by need: The wealthy would receive a reduced payment, while dual-eligibles for Medicare and Medicaid would receive an additional account to help with out-of-pocket expenses. Contributions would also vary by geography and by health risk. To avoid cherry-picking of healthier individuals in the Medicare exchange, participating health plans would be required to offer coverage to all participants, regardless of health status.

    Changes to Medicaid would consist of moving federal contributions to the program, which is a federal–state partnership, to the states. To reduce Medicaid’s projected unfunded obligations, the allotted funds would grow at a slower rate. This is a good first step to reforming Medicaid. It also suggests giving states new flexibility in providing benefits to their low-income populations in the way that addresses the specific needs of each state. This is a step closer to the federalist system under which the United States is intended to operate. The next step should be to transfer assistance and control directly to Medicaid beneficiaries, enabling them to obtain private health insurance and reorganizing the program toward a patient-centered system. This would help control costs and improve coverage.

    These Medicare and Medicaid reforms should allow beneficiaries to choose health plans that work best for them and create competition between plans to increase efficiency and drive down costs. Putting beneficiaries directly in control of their own health decisions would also create incentives to spend health dollars more wisely. The Rivlin–Ryan plan is a bipartisan solution for reducing long-term deficits that would simultaneously make huge strides in the move towards a health care system that is patient-centric and consumer-driven.

    Posted in Economics [slideshow_deploy]

    8 Responses to One More Step toward the Right Medicare and Medicaid Reforms

    1. George Colgrove, VA says:

      Very good solutions as presented. A proper relationship between the states who already have a government apparatus in place and the private sector who already provides the services. We just need to eliminate the inefficent federal entities that have been acting as the middle people in the process. This can save a tremendous cost and enhance efficency in the program. The states will then implement the program in 50 different ways that can be contrasted against each other for on going improvements. This solutions eliminate a lot of federal waste, redeundancy and overlapping where these functions are already being done elsewhere.

      We need more solutions like this to cut the size and scope of the federal government.

    2. lynn mansfield tx. says:

      Regretably, mechanisms are now in place to enact massive ACOs which represent hospital and selected physician group mergers. These entities are currently asking the FTC to "waive" anti-trust and self referral laws so that they alone are able to bargain with private and government insurers effectively eliminating the competition from solo or small group physician practices which represent 75% of practioners in this state. Once enacted the ACO directed by hospital and insurance companies will be further motivated to "cut costs" by reducing patient treatment options. Doctors should be relieved from anti-trust restraints in order to compete for a living wage and to stay in business rather than become hospital or insurance co. employees.

    3. Roger Baxter. Batavi says:

      I am sorry, but all of this is a weak kneed response. We need spending cuts, now, not off in the future. I am 62, not quite old enough for Medicare, and make a little too much money for Medicaid.

      What could possibly be wrong with a HSA, coupled with a high deductible insurance plan that actually put the people in charge of their own health care? Let Medicare/Medicade provide the initial purse for everyone ($2500?), and the ability to connect to an insurance plan.

    4. Jeanne Stotler, Wood says:

      One solution to both Medicare and Medicaid, stop funding Medicare to those who never contributed, or their spouses contributed to the medicare fund, there are people who come here, get SS, medicare, medicaid , food stamps, rent assistance and any other free thing they can get. Then there are us who have worked and paid into SS, Medicare because we were told 1. We had to, 2. That this would help us when we retired. Then came the DEMS and saw this money sitting there gathering dust and decided to use it to finance the was in Viet Nam, now here we are, in our late 60's, 70's and 80's + and our goverment says "Sorry but we don't owe you anything, you need to go into a corner and die before you cost us any money". I don't trust this administration furthur than I can trow them, if we don't make sure that they are reined in and fast, freedoms restored, goverment returned to what it was intended by our founding fathers, we might as well bend over, grab our ankles—- and you know the rest.

    5. Robert, Crystal Lake says:

      Paul Ryan is brilliant on Health Care, but why is he working for changes in Medicare and Medicaid? He of all people should know that the federal government should not be involved in health care in the first place – except for true commerce matters, like ensuring access across state lines.

    6. Pingback: One More Step toward the Right Medicare and Medicaid Reforms | The … | Medicare Insurance

    7. Michael says:

      I would have preferred these programs never saw the light of day. Now that the genie is out of the bottle, they ultimately need to be turned over to the sole authority of the states, without ANY related federal taxes, funding, Congressional mandates, Presidential or bureaucratic edicts, etc.

      One person's right to healthcare implies a right to another person's time and talent to administer it and yet another person's treasure to pay for it, and I seem to remember reading somewhere that private property shall not be taken for public use without just compensation.

    8. Larry Siders says:

      Market Forces and Health Care don't mix as well as other commodities (things like compassion and doctor loyalty complicate the normal equation of commercial exchange), but the major players in the Health Care game have succeeded in removing the sting of as many of the market forces as possible from themselves. The only way to contain Health Care costs (consistent with freedom) is to place whatever market forces we can back into the equation. Health Savings Accounts combined with high deductible Major Medical Insurance works. Only when people are spending their own money is there any incentive to even bother to look for any cost savings. Mandated cost controls will create shortages and must be avoided.

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