At an AEI event on Tuesday morning, Senators Tom Coburn (R-Okla.) and Richard Burr (R-N.C.) discussed their plan for Medicare reform — the Seniors’ Choice Act. Sen. Burr stressed the need for income testing for Medicare beneficiaries and the importance of eliminating the Independent Payment Advisory Board. Sen. Coburn outlined the general structure of their plan: premium support including traditional fee-for-service Medicare.
In kicking off Part II of the event, Medicare’s chief actuary Richard Foster discussed the findings of the 2012 Medicare Trustees Report that was released yesterday. According to calculations, Medicare spending currently represents 3.7 percent of U.S. gross domestic product (GDP) and could grow to 6.7 percent in the next 75 years. Moreover, if hospitals do not achieve greater productivity and Congress continues to override changes to Medicare’s Sustainable Growth Rate formula, that figure will jump to 10.4 percent of GDP in 2086.
AEI’s Norman Ornstein emphasized the importance of Medicare reform in the upcoming presidential campaign and stressed how much this reform hinges on the outcome of the Supreme Court’s decision on the Affordable Care Act (ACA). James Capretta of the Ethics and Public Policy Center and AEI argued that the ACA is not deficit-neutral — as the Congressional Budget Office claims — because it uses new taxes to fill the deficit in the hospital insurance fund and to fund new entitlements.
Wendell Primus of the Office of the House Minority Leader disagreed with Capretta’s objections, touting the ACA’s ability to improve Medicare’s solvency and lower overall health spending. Robert Reischauer of the Urban Institute and Gail Wilensky of Project Hope then highlighted the role the private sector will play in reforming the health care system. Wilensky concluded the discussion by reminding everyone that despite the political contentiousness of Medicare reform, some agreement exists on how to improve the program.
-- Catherine Griffin
Medicare is facing a fiscal calamity: how can the growth of Medicare spending be limited while ensuring that beneficiaries continue to have access to affordable health care? With an aging U.S. population and rising health costs, Medicare spending is growing at an unsustainable rate.
In Part I of this event, Senators Tom Coburn (R-OK) and Richard Burr (R-NC) will discuss their proposed Seniors’ Choice Act, which provides a reform blueprint seeking to promote health plan competition and to give beneficiaries a choice between traditional Medicare and private plans. Sen. Coburn and Sen. Burr will discuss the urgent need for Medicare reform and will address how their proposal will allow for maintenance and improvement of the program.
In Part II of this event, Richard Foster, Medicare’s chief actuary, will discuss the findings of this year’s Medicare trustees report, which will provide an essential update on the program’s fiscal outlook, including the potential of ACA initiatives to bend Medicare’s cost curve. Rep. Paul Ryan’s (R-Wis.) plan would give individuals a premium support payment that they could use to purchase coverage from competing health plans. A panel of experts will debate the implications of the Medicare trustees report findings for seniors and taxpayers, their potential impact on the upcoming election and the likelihood that future legislation will reform and preserve the Medicare program.
Full video will be posted within 24 hours.