Will Competition Return to Medicare?

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Abstract

One of the primary goals of the Medicare Modernization Act (MMA) of 2003 was to re-establish competition among private health plans in Medicare. At one level, that goal has been met. Thanks in part to more generous payment levels and more flexible regulations, numerous private plans now offer the new outpatient prescription drug benefit and most seniors can choose a comprehensive health plan (including preferred provider organizations, health maintenance organizations, and private fee-for-service plans) as an alternative to traditional Medicare. However, plans offering the drug benefit solely (rather than the full benefit package) are not sustainable without continued heavy subsidies, and defects in the design of the MMA inhibit effective competition between traditional Medicare and private plans. Although the drug benefit might prove to be a significant obstacle to future reforms, it is an important test of competition and consumer choice in Medicare.

Joseph Antos is the Wilson H. Taylor Scholar in Health Care and Retirement Policy at AEI.

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About the Author

 

Joseph
Antos

  •  


    Mr. Antos's research focuses on the economics of health policy—including Medicare and broader health system reform, health care financing, health insurance regulation, and the uninsured—and federal budget policy. He has written and spoken extensively on the Medicare drug benefit and has led a team of experienced independent actuaries and cost estimators in a study to evaluate various proposals to extend health coverage to the uninsured. His work on the country’s budget crisis includes a detailed plan to achieve fiscal stability and economic growth developed in conjunction with AEI colleagues.  


    Joseph Antos is also a health adviser to the Congressional Budget Office and recently completed two terms as a commissioner of the Maryland Health Services Cost Review Commission.  Before joining AEI, Mr. Antos was Assistant Director for Health and Human Resources at the Congressional Budget Office and held senior positions in the U.S.Department of Health and Human Services, the Office of Management and Budget, and the President’s Council of economic Advisers.


     



    Watch Mr. Antos in an interview with Bill Erwin of the Alliance for Health Reform on "Will Health Reform Reduce the Federal Deficit?"


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