Posted on 02/23/2012 11:20:20 AM PST by SeekAndFind
Many politicians (and many voters) duck the hard choices when it comes to Medicare reform. But what’s remarkable about the past year is that, in some ways, momentum appears to be building for real improvements to the program’s quality and sustainability. Based on a new proposal from Sens. Richard Burr (R., N.C.) and Tom Coburn (R., Okla.), the impossible seems within reach: the triumph of sound policy over interest-group politics.
Today, Sens. Burr and Coburn have put forth a new Medicare reform proposal, the Seniors’ Choice Act, which combines the ideas behind the best two bipartisan plans that came out last year. If Wyden-Ryan and Lieberman-Coburn got together to do what many people did on Valentine’s Day, Burr-Coburn would be the result.
I’d previously called Wyden-Ryan a “game changer” for its utilization of two key reform principles, premium support and competitive bidding. Lieberman-Coburn hits the other key principles of reform, including cost-sharing and fraud prevention. As I wrote last June,
I have a lengthy essay in the Summer 2011 issue of National Affairs on Medicare reform, entitled “Saving Medicare from Itself.” In it, I discuss six core concepts for real Medicare reform: (1) preserving benefits for people aged 55 and older; (2) making sure that retirees share more of the costs of their care, and thereby a stake in prudent consumption; (3) means-testing; (4) indexing the Medicare retirement age to life expectancy; (5) aggressive fraud prevention; (6) allowing seniors to shop for value in insurance plans. The Lieberman-Coburn bill hits on many of these points in a way that well complements Paul Ryan’s premium support proposal.
(Excerpt) Read more at forbes.com ...
CLICK ABOVE LINK FOR THE VIDEO
FEATURES OF THE PLAN:
* System of competitive bidding and premium support, in which retirees would be able to choose among private plans and a “public option” of traditional Medicare. Starting 2016.
* Creates a new independent agency, the Medicare Consumers’ Protection Agency, that would stand outside of the Department of Health and Human Services. This is key, as the HHS bureaucracy would otherwise be likely to undermine competitive bidding and premium support as to maintain its bloated Medicare budget. The intent is not only [regulatory] compliance but also decisions around the construction of the plans, so people have the security of knowing they’re getting the plans they purchased.
The MCPA is modeled after the Office of Personnel Management, which administers a very similar plan for the Federal Employee Health Benefits Program (FEHBP).
* Seniors would be able to change plans once every year and they would get to keep part of the difference if they chose a plan that is less expensive than the level of government-provided premium support, providing further incentives for seniors to engage in cost-conscious behavior.
* Burr-Coburn gradually increases the Medicare eligibility age from 65 today to 67 in 2027. This will allow Medicare’s eligibility age to match that of Social Security.
* Combine Medicare Part A (hospitalization) and Part B (outpatient physician services) into a single deductible, with a unified deductible of $550, co-insurance of 20 percent of costs until a retiree had spent $5,500, co-insurance of 5 percent until he had spent $7,500, and full coverage above $7,500.
* MEANS TESTING: Greater cost-sharing for people with higher incomes: a far superior solution to raising taxes to subsidize these individuals. Those with incomes above $85,000 as individuals or $170,000 as married couples would be subject to a higher cap on out-of-pocket costs: $12,500 instead of $7,500. For those with incomes above $107,000 individual or $214,000 family, the cap would be higher ($17,500) and even higher ($22,500) with those making $160,000 as individuals or $320,000 as married couples.
* The plan would charge lower Medicare premiums to lower-income seniors, and higher premiums to higher-income retirees. Today, there are 60,000 retirees making $1 million or more that get fully-subsidized Medicare coverage.
* Bars Medigap plans from covering the first $500 of a retiree’s liabilities, and capping Medigap coverage to 50 percent of the next $5,000 of his out-of-pocket costs.
“We don’t let anyone buy their way into first-dollar coverage,” says Sen. Burr. “It’s done on a sliding scale so low-income seniors would have some skin, but high-income individuals…will be conscious of the decisiosn they make with their health care.”
* Eliminates some of the perverse incentives around hospitalization. In addition, by introducing competitive bidding into Medicare (see below), the bill would allow for the design of new plans that could manage cost-sharing in a more efficient way, that seniors would migrate to voluntarily.
* Plan gradually increases Medicare premiums by 2 percent a year, in order to ensure that seniors paid for premiums equaling 35 percent of the program’s costs. Originally, premiums paid for 50 percent of the program’s costs, but this number has declined to 25 percent today.
* Repeal IPAB, Obamacare’s Medicare rationing board. Replaces it with a system that allows seniors to voluntarily chose the benefits and plans that best suit their needs.
Once Medicare has spent more for a person's care than that person paid into Medicare (plus a reasonable allowance for compound interest) during their working life, any further amounts spent by Medicare would be assessed against that person's estate.
Those Freepers who still claim that "I'm only getting back what I paid in!" should have no problem with this.......
The best proposal that I have seen to date. I think I can live with it. (Pun semi-intended)
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