title: Is premium support the right medicine for Medicare?
abstract: This paper assesses the desirability of transforming Medicare into a premium-support system. I focus on three areas crucial to the future of Medicare: cost savings, beneficiary choice, and the stability of traditional Medicare. Based on my analysis of the Bipartisan Commission on the Future of Medicare plan, I find substantial problems with adopting premium support for Medicare. In particular, projections of premium-support savings are based on questionable assumptions that the slowdown in health spending during 1993-1997 can be sustained and extrapolated to future Medicare performance. Consequently, premium support may inadvertently destabilize public Medicare and erode beneficiary choice without achieving substantial savings.
authors.forename: J
authors.initials: J
authors.lastname: Oberlander
mesh_terms: D000206:Actuarial Analysis; D000368:Aged; D016536:Competitive Medical Plans / Q000458:organization & administration*; D017046:Cost Savings; D017047:Cost Sharing; D005249:Fees and Charges; D005380:Financing, Government / Q000458:organization & administration*; D005544:Forecasting; D018166:Health Care Reform / Q000458:organization & administration*; D005102:Health Expenditures / Q000706:statistics & numerical data / Q000639:trends; D006801:Humans; D015273:Insurance Selection Bias; D018854:Managed Competition / Q000458:organization & administration*; D020398:Medicare Part C / Q000458:organization & administration*; D011057:Politics; D014481:United States