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A Blueprint for Medicare Reform

Posted By Margot Crouch On August 17, 2011 @ 5:00 pm In Obamacare | Comments Disabled

Heritage Policy Analyst Kathryn Nix recently released a paper [1] explaining why the premium support, or defined contribution, model for Medicare reform found in Heritage’s Saving the American Dream [2] is the best way to get out of our health care spending and debt crises. Several elements of this approach to reform have already been applied to the program under Medicare Part D and Medicare Advantage. Writes Nix [1], “Applying their successes to the rest of Medicare can restore permanent solvency to the program, preserve robust access to high-quality care, encourage continued physician participation, and strengthen Medicare as real insurance for tomorrow’s seniors.”

The Heritage plan would replace the current “defined benefit” structure of Medicare with a defined contribution for seniors to offset their costs, whether they choose to enroll in traditional Medicare’s fee-for-service program, keep their existing private health insurance and bring it with them into retirement, or purchase another private plan that better suits their personal needs.

Nix notes [1] that even though such a plan has come under fire from the left, similar elements in existing Medicare programs have already proven successful. Medicare Advantage, which allows beneficiaries to receive traditional Medicare’s benefits from a menu of private options, “gives seniors access to richer benefits packages, lower and simpler premiums, and high quality care.” And Medicare Part D, the hugely popular prescription drug program created in 2003, is expected to spend $261 billion less over a 10-year period than initially projected, thanks largely to consumer choice and competition among insurers. Both Medicare Advantage and Part D offer seniors health benefits through defined-contribution approaches.

Congress should apply a similar premium-support solution to the rest of the Medicare program to address its insolvencies and maintain patient satisfaction. As Nix points out [1], President Obama’s solution is far worse for patients and will not preserve the quality of our health care system: “The Obama Administration’s plan thus far is to allow an unelected board to tinker with the program, most likely by reducing payments to providers, which would guarantee reduced access to care.”

We do not have time to entrust unaccountable government bureaucracy [3] with saving the Medicare program—the Medicare Part A Trust Fund is projected to run dry in 2024. If we want to preserve Medicare—without burdening our children and grandchildren with mountains of debt they cannot pay—Congress should embrace the Heritage Plan [2] for a premium-support model of reform for Medicare.

To read more, click here [1].


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2011/08/17/a-blueprint-for-medicare-reform/

URLs in this post:

[1] released a paper: http://www.heritage.org/Research/Reports/2011/08/Consumer-Driven-Medicare-Reform-Models-for-Success

[2] Saving the American Dream: http://savingthedream.org/

[3] entrust unaccountable government bureaucracy: http://www.heritage.org/Research/Reports/2011/01/Obamacare-and-the-Independent-Payment-Advisory-Board-Falling-Short-of-Real-Medicare-Reform

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