MedPAC to examine Medicare premium support

MedPAC Examines How Medicare Premium Support Might Work

By Kerry Young, CQ Roll Call
The Commonwealth Fund, November 7, 2016

Congress's advisers on Medicare are studying what steps would be needed if lawmakers eventually were to shift the giant federal health entitlement program to a so-called premium support model designed to restrain spending. House Republicans have called for making such a change.

The Medicare Payment Advisory Commission (MedPAC) intends to offer lawmakers a review of these options in its June 2017 report, said Eric Rollins, an analyst with the panel. MedPAC will not make formal suggestions to Congress on this topic next year.

"We are not going to recommend for or against premium support," said Paul Ginsburg, a MedPAC member and healthy policy researcher with the Brookings Institution and the University of Southern California.

Ginsburg said he expects Congress at some point to take a serious look at the concept of premium support, although it's currently unlikely to do so at this time. MedPAC's work this year will help prepare lawmakers for eventual discussions of this approach to managing Medicare, he said.

MedPAC intends to outline possible paths and pitfalls toward a more competitive system for administering health benefits for senior citizens and people with disabilities. Traditional fee-for-service Medicare might compete with insurer-run Advantage plans under this system, Rollins said in his briefing. People enrolled in Medicare could avoid higher premiums by seeking out plans with lower costs in this new model, MedPAC's Rollins said.

House Republicans earlier this year called for a move toward premium support as part of their policy paper on health care. In the House GOP model, people on Medicare would be given a choice of insurer-run plans and traditional Medicare starting in 2024. In the paper, House Republicans note that the idea of premium support "is based on a long history of bipartisan reform plans, including the 1999 Breaux-Thomas Commission and the 2010 Domenici-Rivlin Report."

The prospect of more out-of-pocket costs for beneficiaries likely will prove a hurdle for lawmakers who want to shift to premium support. Willis D. Gradison Jr., a MedPAC member who represented an Ohio district in the House from 1975 through 1993, raised this political consideration.


October 2016 meeting presentation: Reforming quality measurement and implications for premium support

By Ledia Tabor and Carlos Zarabozo
MedPAC, October 7, 2016

Premium support in a local market area

* Each plan bids to provide benefits to average health beneficiary

* Medicare determines government contribution based on FFS and private plan bids

* If beneficiary selects plan with bid above government contribution they pay a premium; plan with lower bids give enrollees a cash rebate



By Don McCanne, M.D.

MedPAC (Medicare Payment Advisory Commission) advises Congress on Medicare. As the October 7 MedPAC presentation demonstrates, they are currently preparing for Congress a review of premium support - a voucher model designed to restrain federal spending by shifting more costs to Medicare beneficiaries.

It is unlikely that today’s election will change the political climate to where immediate enactment of premium support would be likely, but since the 1999 Breaux-Thomas (Frist, Jindal) Commission there has been bipartisan support of this proposal, though predominantly from the Republicans. Both sides in Congress do want changes, and it is quite possible that premium support could be advanced through a conservative-neoliberal coalition effort involving tradeoffs, especially since it is likely that we will have a neoliberal president who could well sign such legislation.

So pay attention or we may end up with a privatized, defined contribution Medicare program which will compound problems of affordability and access for our Medicare beneficiaries, not to mention stifling our dreams of an improved Medicare for all.