In 2011, the first
big wave of the huge baby-boom generation will start to retire. In
these final days of the House-Senate conference on Medicare
legislation, the conferees must decide whether or not they are
going to set in motion a real reform of the Medicare program for
that next generation of retirees.
Patient Satisfaction
High
Among many, if not
most, health policy analysts, real reform means one thing: premium
support. The basic principle of premium support is that the
government would make a direct premium contribution to the health
plan of the beneficiaries' choice, including, if they wished, the
private health plans they had during their working lives. The
government contribution would be generous and would be based on a
formula that reflects real market conditions.
In its ease of
administration and flexibility, the program would operate on the
same basis as the 43-year-old Federal Employees Health Benefits
Program (FEHBP) with a well-tested premium support system. Multiple
plans compete in every area of the country, including rural areas,
costs are controlled, and patient satisfaction is very high.
The Senate bill
includes no such reform. The House bill (H.R. 1) does create a
premium support system, but it would not begin until 2010, one year
before the first major wave of the baby boomers retire, and the
House provisions would be phased in over a period of five
years.
Lemieux's
Blueprint
Congress has an
opportunity to build on the House provisions in a way that
strengthens them and secures a positive change for the next
generation of seniors and taxpayers.
Jeff Lemieux, a
senior economist with the Progressive Policy Institute, research
arm of the Democratic Leadership Council, and the founder of
Centrists.org, a new nonpartisan research organization, has
outlined in detail how Congress could create a premium support
system.
A former staff
member with the National Bipartisan Commission on the Future of
Medicare, which was created in 1997, Lemieux explains how:
- A Medicare
premium support is superior to benefit cuts or tax increases in
controlling future Medicare costs;
- The premium
support model differs from the conventional defined contribution
approach;
- The Congress
could set government contributions to health plans and adjust for
risk and geographical differences; and
- Drug coverage
would be integrated into a premium support system.
The full text of
the study, , by
Jeff Lemieux (November 4, 2003)