Having it all: national benefit equity and local payment parity in Medicare.
The Medicare Payment Advisory Commission (MedPAC) has identified two important problems with the Medicare+Choice (M+C) program: nationwide geographic inequity in government-financed benefits, and unequal government payments for M+C plans versus fee-for-service (FFS) Medicare in the same market area. MedPAC concludes that both problems cannot be solved simultaneously. We argue that both problems could be solved if Congress discontinued its policy of underwriting the cost of FFS Medicare. Instead, Congress should define a national entitlement benefit package and have all health plans submit bids on the package in each market area. The government's premium contribution should be equal to the lowest bid submitted by a qualified health plan in each market area. The contribution could be adjusted for health risk, the special obligations of FFS Medicare, and welfare enhancements associated with FFS Medicare that are valued by both beneficiaries and taxpayers but unrelated to beneficiaries' health status.
Dowd
Bryan
B
Division of Health Services Research and Policy, University of Minnesota School of Public Health, USA.
Feldman
Roger
R
D000368:Aged; D002391:Catchment Area, Health / Q000191:economics; D003164:Competitive Bidding; D017598:Efficiency, Organizational; D018588:Fee-for-Service Plans / Q000191:economics*; D006279:Health Maintenance Organizations / Q000191:economics*; D006801:Humans; D007342:Insurance Benefits / Q000331:legislation & jurisprudence* / Q000592:standards; D020398:Medicare Part C / Q000191:economics / Q000331:legislation & jurisprudence*; D020406:Medicare Payment Advisory Commission; D011907:Rate Setting and Review / Q000331:legislation & jurisprudence* / Q000592:standards; D020379:Risk Adjustment; D012935:Social Justice; D012941:Social Responsibility; D012959:Socioeconomic Factors; D014481:United States