July 29, 2014

An Encouraging Medicare Proposal

  • The American health care system is a patchwork of public and private programs that serve citizens in different ways, depending on their age, military...

 Bipartisan efforts to reform Medicare were elevated this week by the release of a proposal from Senate Budget Committee member Ron Wyden (D-Ore.) and House Budget Committee Chairman Paul Ryan (R-Wis.). Their proposal would convert Medicare into a “premium support” system beginning with newly eligible seniors in 2022. Under this change, recipients would choose whether to remain in traditional Medicare or get support from the government to help purchase private insurance. The value of the support would rise with premiums.
 
In a new blog posting today, Robert L. Bixby, executive director of The Concord Coalition, said it was “heartening” to see a “bipartisan pair of prominent lawmakers” release a joint Medicare reform proposal. He also called premium support “a promising strategy for putting Medicare on a realistic budget while providing incentives for providers, insurers and beneficiaries to improve the value and quality of care.”
 
Bixby notes that the new proposal differs significantly from the Medicare plan that Ryan proposed last spring and that was included in this year’s House Budget Resolution. Under the new proposal, for example, traditional Medicare would remain an option for seniors.
 
The Wyden-Ryan plan is very similar to the one proposed by the Rivlin-Domenici Bipartisan Policy Center Debt Reduction Task Force (BPC). That plan has recently been updated and outlined in a premium support primer produced by the Brookings-Heritage Fiscal Seminar.

With limited details released by Wyden and Ryan, it is not clear whether the plan would actually reduce long-term budget deficits. The Affordable Care Act already sets a target for Medicare growth that is the same as specified in the Wyden-Ryan plan.

“With or without premium support,” Bixby writes, “there is no question that at some point Congress will need to tackle Medicare reform. No fiscal sustainability plan will work unless Medicare costs are brought under control.”

Read more with The Wyden-Ryan Medicare Plan Moves the Ball Forward