This report examines one of the leading approaches to reforming the Medicare program, known as premium support. Under this model, the current Medicare program would be replaced by a system of competing public and private health plans, and the federal government would pay a set amount per beneficiary.
Full Answer
What is a premium support model?
Premium support is a general term used to describe an approach to reform Medicare that aims to reduce the growth in Medicare spending by increasing competition among health plans and providing a stronger incentive for beneficiaries to be cost-conscious in their plan selection.
What is an LPI plan in Medicare?
LPI designation is given to health plans with poor or below average Medicare plan ratings (also called “star ratings” or “quality ratings”) – i.e., less than three stars for three or more consecutive years.
What are some reforms of Medicare?
8 Medicare and Medicaid reforms that would have the biggest impact on federal spendingEstablish caps on federal spending for Medicaid. ... Reduce federal Medicaid matching grants. ... Change the cost-sharing rules for Medicare and restrict Medigap insurance. ... Increase the premiums for Parts B and D of Medicare.More items...
How do you fix Medicare?
7 Ways to Fix MedicareMedicare is actually the more immediate problem. ... Seven ways to fix Medicare. ... Raise Medicare taxes. ... Institute means-testing. ... Use the federal government's might to negotiate. ... Index Medicare to life expectancies. ... Institute hospital-at-home care. ... Promote virtual visits and care.More items...•
Why is it necessary to reform Medicare?
Why reform Medicare? The main reason for reforming Medicare is not that the program is the principal driver of future federal spending increases, although it is. The main reason is not that Medicare beneficiaries could be receiving much better coordinated and more effective care, although they could.
When was Medicare reformed?
Medicare policy under the Obama Administration (2009-2017) Former President Barack Obama signed the Affordable Care Act (ACA) into law on March 23, 2010—establishing what would become one of the longest lasting legacies of his two terms in office.
What is a healthcare reform?
Health reform in the US refers to the overhaul of its health care system and is frequently used interchangeably with the Affordable Care Act (ACA). Health reform includes addressing the ever- increasing costs of national health care by individuals, families, and the government.
What happens if Medicare runs out of money?
It will have money to pay for health care. Instead, it is projected to become insolvent. Insolvency means that Medicare may not have the funds to pay 100% of its expenses. Insolvency can sometimes lead to bankruptcy, but in the case of Medicare, Congress is likely to intervene and acquire the necessary funding.
What are the 5 levels of Medicare appeals?
The Social Security Act (the Act) establishes five levels to the Medicare appeals process: redetermination, reconsideration, Administrative Law Judge hearing, Medicare Appeals Council review, and judicial review in U.S. District Court. At the first level of the appeal process, the MAC processes the redetermination.
How can Medicare be sustainable?
Increase co-payments from retirees – putting more of the costs of the program on retirees is another way to make Medicare more sustainable. This has already occurred by increasing the Medicare Part B premiums and increasing deductibles.
What is Medicare premium support?
Under the premium support model as described in Saving the American Dream, the Wyden–Ryan plan, and elsewhere, seniors would enroll in the health plans of their choice. Medicare would then cover a portion of the premiums (the premium support, also sometimes called a defined contribution) associated with a senior’s chosen plan. This approach is similar to the federal contribution that millions of federal employees and retirees receive through the Federal Employee Health Benefits Program (FEHBP) and is typical of most health plans purchased today by non-seniors in the private sector. Most importantly, it is very similar to the structure for Medicare Advantage and Medicare Part B and Part D. Essentially, the current structure for the rest of Medicare would be extended to Part A, the sole holdout and the oldest element of Medicare. Further, as with the Part B and Part D premiums, the amount of premium support would decline once the senior’s income exceeds a certain threshold.
What is the Obamacare plan?
The idea is to give doctors and hospitals financial incentives to develop new organizations for delivering care that would be more cost-efficient, and then the taxpayers share in the savings through Medicare.
What is the second radical management proposal?
The second radical management proposal is to cap total Medicare spending and then allow an unaccountable board to enforce the cap by cutting payments to service providers. President Obama has advocated this approach, and unbeknownst to many Americans, it was included in Obamacare in the form of the Independent Payment Advisory Board. [14]
Why is Medicare reform inevitable?
The question is whether Congress will extend the premium support model to the rest of Medicare or pursue a radical approach that either ignores the existing problems until the program collapses or forces all Americans, seniors and non-seniors alike, into a national, government-run, European-style health care system. The premium support approach would incrementally build on the program as it operates today to provide seniors with more choice, leading to a more rational health care market for all Americans.
Is Medicare a one stop shop?
Many Americans and many policymakers imagine Medicare as a one-stop shop for all seniors’ health insurance needs. Thus, they have difficulty imagining seniors sorting through the complexities of buying their own health insurance. In fact, today, tens of millions of seniors independently buy some form of health insurance in the private market:
Is Medicare a sound system?
Despite the mounting evidence of Medicare’s financial troubles, a number of policymakers and major institutional voices maintain that Medicare is fundamentally sound despite its current drain on general revenues. Indeed, these defenders of the status quo are so enamored with Medicare as it operates today that they often argue its current design should be extended to the rest of the U.S. population—the “Medicare-for-all” concept.
Can seniors make their own health insurance decisions?
Many seniors are fully capable of making their own choices about financial matters, including health insurance. They have demonstrated that competence by enrolling in Medicare Advantage, the Medicare drug benefit, and Medigap supplemental coverage, not to mention making the other financial decisions on life insurance, investments, estate planning, and reverse mortgages, among others. Nevertheless, many seniors have a reasonable concern that as they grow older, their willingness or ability to make financial decisions could diminish. Many take comfort that traditional Medicare run by a presumably benevolent and competent government will offer them reliable insurance against high health care costs without having to wrangle with private health insurance companies.
What is premium support?
Premium support, like a voucher, is a variant of defined-contribution health care financing. This general approach, though differing in details, is neither novel nor partisan. In 1983, former Representatives Richard Gephardt (D–MO) and David Stockman (R–MI) introduced the National Health Care Reform Act. It included comprehensive Medicare reform based on a defined contribution to enrollees’ choice of plan in the form of a “direct contribution” toward payment of a plan’s premium: a “voucher.” In that plan, the contribution would have been drawn from Part A and Part B Trust funds, but when fully phased in, the amount would be based on the weighted average of premiums in a geographical area and indexed to the Gross National Product (GNP) deflator. [1]
What is FEHBP insurance?
The Federal Employees Health Benefits Program (FEHBP), administered by the U.S. Office of Personnel Management (OPM), is a working model of a premium support system. The FEHBP provides coverage for active and retired federal employees, including members of Congress and their staffs. This popular program serves approximately 8 million individuals. Enrollees choose from a wide variety of health plans, including conventional insurance, managed care, plans sponsored by employee or union organizations, and high-deductible plans.