Fix Health Care Policy

The Washington Post Agrees: It’s Time to Make a Down Payment on Medicare Reform

The editorial board of The Washington Post, no organ of conservative opinion, is absolutely right: “Medicare as we know it is not sustainable,” and the “ultimate solution” is structural reform. Bingo.

The right structural reform is to expand Medicare’s defined-contribution financing (routinely called “premium support”) as it broadly exists today in Medicare Part D to the entire Medicare program.

As the Post’s editors observe, consensus does not yet exist on Capitol Hill for comprehensive structural reform. However, there are several short-term, bipartisan proposals compatible with structural reform that can improve the program, trim the debt, and reduce the dangerous financial pressures that threaten Medicare’s viability.

The Post’s key recommendations—yielding an estimated 10-year savings of $420 billion—largely track The Heritage Foundation’s proposed changes for traditional Medicare as part of its comprehensive budgetary reform proposal, Saving the American Dream.

Read the rest on The Foundry…

Tags: defined-contribution financing, editorial board, Medicare reform, Saving the American Dream, structural reform, The Washington Post

Following a Big Week in North Carolina, Bus Tour Heads to Arkansas

Now heading for state number 12 after nearly two months on the road, The Heritage Foundation/Family Research Council tour Your Money, Your Values, Your Vote continues rolling across America. Following a successful week in North Carolina—reaching thousands of people over 11 events—this weekend we head southwest to Arkansas.

Why are Heritage and FRC on a road trip? We’ll let recent press coverage speak for itself. Though they don’t always get it right, media outlets have followed the crowds and listened in as local and national leaders present the principles driving this nationwide effort.

Jessica Anderson of Heritage Action for America spoke with the Winston-Salem Journal, which posted a video of our stop in Winston-Salem.

Read the rest on The Foundry…

Tags: ObamaCare, Saving the American Dream, Values bus tour

Ryan-Wyden: The Basic Ingredients of Structural Medicare Reform

Congressman Paul Ryan (R–WI) and Senator Ron Wyden (D–OR) have proposed a new bipartisan framework for structural Medicare reform. It continues the conversation with the American people on a solution to save the popular but financially troubled entitlement program.

While there are differences between the proposal and the Heritage plan outlined in Saving the American Dream, and while their proposal does not go as far or as fast as it should in changing the massive entitlement program, it would establish a premium-support system of financing for Medicare, a variant of a defined contribution toward the health care plans chosen by retirees. This policy is central to the transformation of Medicare into a consumer-based system relying on competition rather than bureaucratic fiat.

Also, similar to the Heritage proposal, government payment for health coverage would be based on competitive bidding among health plans, and Medicare would be put on a budget. This is a crucial improvement in the functioning of the program, because pricing would be determined by market competition rather than by Washington bureaucrats.  (Read the rest on The Foundry…)

Tags: competition, consumer-based health care, defined contribution, Medicare, premium support, Rep. Paul Ryan, Saving the American Dream, Sen. Ron Wyden

Immediate Medicare Reforms Could Slash Nation’s Debt

When it comes to the super-committee’s duty to reform Medicare, you’ll likely to hear the same tired and unsuccessful methods for lowering Medicare’s soaring costs: raising taxes, manipulating payment formulas, or making even deeper payment cuts to doctors and hospitals.

The best way to reform Medicare is transform it into a premium-support program, which provides a defined contribution to seniors’ chosen health plans, which include a variety of private plans as well as traditional Medicare fee-for-service. This approach — based on injecting consumer choice and competition into Medicare — has a long history of bipartisan support, going back to the early 1980s.

Congress could adopt this approach through a two-stage, ten-year structural reform, which the Heritage Foundation outlined in its long-term deficit plan, “Saving the American Dream.” When compared with the Congressional Budget Office’s baseline, Heritage’s two-stage Medicare reform plan would result in $9.4 trillion in savings by 2035.  (Read the rest on The Foundry…)

Tags: co-payments, Medicare reforms, premium support program, repeal Obamacare, Saving the American Dream, super committee

The Video AARP Hasn’t Made: Medicare’s Need for Structural Reform

Medicare—on its current path—cannot be sustained. At a recent hearing held by the Senate Special Committee on Aging, Ranking Member Senator Bob Corker (R–TN) stressed the importance of Medicare reform. According to Corker, in 2011, “The U.S. spent $572 billion on Medicare, and spending is projected to increase to $1 trillion in 2021.”

The relationship between the amount citizens pay in to Medicare and the benefits they receive presents another losing equation for taxpayers. If an average couple combined makes $87,000 a year, they will pay $119,000 (including their employers’ contributions) into Medicare in their lifetimes but receive $357,000 in benefits. This disparity points to a clear structural flaw that must be addressed. As Joseph Antos of the American Enterprise Institute pointed out, “Business as usual with a few tweaks will not be effective in preserving Medicare for the long term.”

Saving Medicare will require transitioning the program to a premium-support system, which would allow seniors to choose a private health plan that works best for them, using a government contribution and requiring insurers to compete for their business like they currently do in Medicare Advantage and Medicare Part D. Heritage’s Saving the American Dream plan outlines how to achieve this.  (Read the rest on The Foundry…)

Tags: AARP, AEI, benefits, Medicare reform, Saving the American Dream, taxpayer subsidies

VIDEO: Continuing the Fight Against Obamacare on Capitol Hill

On Wednesday, Ken Hoagland, chairman of Restore America’s Voice Foundation, delivered the petitions of 1.6 million Americans demanding the repeal of Obamacare to legislators on Capitol Hill.

After the press conference, several members stayed to talk with Heritage about the problems with the current law, the progress of the repeal effort, and the sorts of conservative solutions they would like to see introduced. 

To learn more about conservative healthcare solutions, read our plan for America — Saving the American Dream

Tags: ObamaCare, petitions, repeal the law, Saving the American Dream

A Blueprint for Medicare Reform

Heritage Policy Analyst Kathryn Nix recently released a paper explaining why the premium support, or defined contribution, model for Medicare reform found in Heritage’s Saving the American Dream is the best way to get out of our health care spending and debt crises. Several elements of this approach to reform have already been applied to the program under Medicare Part D and Medicare Advantage. Writes Nix, “Applying their successes to the rest of Medicare can restore permanent solvency to the program, preserve robust access to high-quality care, encourage continued physician participation, and strengthen Medicare as real insurance for tomorrow’s seniors.”

The Heritage plan would replace the current “defined benefit” structure of Medicare with a defined contribution for seniors to offset their costs, whether they choose to enroll in traditional Medicare’s fee-for-service program, keep their existing private health insurance and bring it with them into retirement, or purchase another private plan that better suits their personal needs.  (Read the rest on The Foundry…)

Tags: debt crises, fee-for-service, health care spending, Medicare, ObamaCare, Part D, Saving the American Dream