"[Premium-support] is the very antithesis of Obamacare’s government-centric approach to health care financing… private plans can deliver the full Medicare package of benefits at a significantly lower cost--nearly 10 percent lower, on average--than the government-administered fee-for-service program. That’s precisely the win-win proposition Paul Ryan has been touting." –Jim Capretta, AEI
In a just-published piece, American Enterprise Institute (AEI) health scholar James (Jim) Capretta highlights the flawed findings of a recent article in the Journal of the American Medical Association (JAMA) by researchers who attempt to discredit premium-support reform of Medicare. Premium support is an idea supported by legislators such as Paul Ryan (R-WI) and Ron Wyden (D-OR) that would subsidizes beneficiaries, enabling them to purchase their own private insurance. As Capretta point out the very findings of the study actually demonstrate the benefits of premium support.
Among his key points:
- Private plans can deliver the full Medicare package of benefits at nearly 10% less than the government plan. Attacks against premium support based on the JAMA study will claim that it costs seniors "nearly $800" if they stay in traditional, government-administered Medicare. This is based on the finding that private plans can deliver full benefits at a lower cost than government-administered fee-for-service programs. That is exactly the point of premium support: beneficiaries can get comprehensive Medicare benefits for no additional premium if they select less expensive private plans.
- The study's own analysis shows that no senior would necessarily pay any more for Medicare coverage under premium-support. If competition introduced new ways of providing and structuring coverage and care that significantly reduced costs, the current fee-for-service Medicare plan could learn how to reduce its own costs. Taxpayers and the program’s beneficiaries would almost certainly save even more than the significant amount the JAMA study implies.
- No current senior, and no one under 55 today, would be affected by the proposed reforms. Attacks on premium-support also ignore that the Ryan-Wyden proposal would only apply to entrants into the program after 2023. Telling current seniors that the reforms will take away their Medicare is untrue.
James Capretta has worked on health care policy at the White House's Office of Management and Budget, at the Senate Budget Committee and at the House Committee on Ways and Means. He is available for interviews and can be reached at jcapretta@eppc.com.
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