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Immediate Medicare Reforms Could Slash Nation's Debt

Posted By Robert Moffit On October 25, 2011 @ 1:59 pm In Obamacare | Comments Disabled

When it comes to the super-committee’s duty to reform Medicare, you’ll likely to hear the same tired and unsuccessful methods for lowering Medicare’s soaring costs: raising taxes, manipulating payment formulas, or making even deeper payment cuts to doctors and hospitals.

The best way to reform Medicare is transform it into a premium-support program, which provides a defined contribution to seniors’ chosen health plans, which include a variety of private plans as well as traditional Medicare fee-for-service. This approach — based on injecting consumer choice and competition into Medicare — has a long history of bipartisan support, going back to the early 1980s.

Congress could adopt this approach through a two-stage, ten-year structural reform, which the Heritage Foundation outlined in its long-term deficit plan, “Saving the American Dream [1].” When compared with the Congressional Budget Office’s baseline, Heritage’s two-stage Medicare reform plan would result in $9.4 trillion in savings by 2035.

During the initial five-year transition period [2], Congress could make immediate changes to help secure the program’s fiscal solvency. Calculations from Heritage’s Center for Data Analysis show the initial reforms would result in nearly $299 billion in savings. These savings could eliminate shortfalls in the Hospital Insurance (HI) trust fund — which CBO estimates to go broke by 2020—and “fix” the Medicare physician payment formula, which threatens a 30 percent payment cut next year to doctors who see Medicare patients.

Read the rest of this column and find out what Congress could do right now at National Review Online [3].

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

URL to article: http://blog.heritage.org/2011/10/25/immediate-medicare-reforms-could-slash-nations-debt/

URLs in this post:

[1] Saving the American Dream: http://www.savingthedream.org/what-it-covers/medicare/

[2] initial five-year transition period: http://www.heritage.org/Research/Reports/2011/10/The-First-Stage-of-Medicare-Reform-Fixing-the-Current-Program

[3] National Review Online: http://www.nationalreview.com/critical-condition/280967/immediate-medicare-reforms-could-slash-nation-s-debt-robert-moffit

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