Is Medicare Part of the Problem? – Michael Cannon
“Saving the American Dream: The Heritage Plan to Fix the Debt, Cut Spending, and Restore Prosperity,” Heritage Foundation, May 10, 2011 by Stuart Butler, Ph.D. , Alison Acosta Fraser and William Beach is one of the finest papers I have ever read. Over the next few days I will post portions of this paper, but I will start off with the section on Medicare.
Medicare must be reformed to solve this huge financing problem, to improve
access to quality care, and to ensure that health care will be available for
younger Americans when they retire.
The Heritage plan accomplishes this by transforming Medicare from an
open-ended and unsustainable defined-benefit entitlement into a properly
budgeted program that focuses Medicare subsidies on those who need them most.
The new Medicare program would look much more like the Federal Employees Health
Benefits Program (FEHBP), the health care system for Members of Congress and
federal employees.
Over a five-year period, the plan transforms Medicare into a
defined-contribution system, with stronger health security for the poor and less
healthy, and guarantees new protections against catastrophic costs for all
enrollees. Today’s traditional fee-for-service Medicare program provides no such
protections. Because of this gap, nine out of 10 seniors feel compelled to buy
supplemental private health insurance, including Medigap, to cover themselves
against the financial devastation of catastrophic illness. This means that
seniors pay an extra set of premiums and often incur high out-of-pocket costs
for both premium and non-premium medical expenses.
Finally, the plan establishes a true long-term budget for Medicare.
The Daily Hatch 