Our research shows that competitive bidding—a key feature of the Wyden-Ryan plan—could save Medicare $339 billion over ten years while maintaining basic benefits and without raising taxes. Crucially, the elderly would not be exposed to the risk of higher health care costs, as in approaches that would set fixed voucher payments toward the purchase of medical insurance.

There is a way to fix the Medicare program without raising taxes: use market-like arrangements to set prices for both the traditional fee-for-service (FFS) program and for private Medicare Advantage (MA) plans. A fully implemented competitive pricing system for Medicare would save $550 billion over 10 years.

Medicare is quickly approaching insolvency, in part because the program pays too much for the services it provides. This volume proposes a groundbreaking solution: Use market-based arrangements to set prices for Medicare plans.

Medicare should use competitive pricing to set the government contribution to the traditional fee-for-service Medicare plan and private Medicare Advantage plans.

The president took an extra week to develop his budget, but the extra time was apparently not enough to yield Medicare policies that could produce real savings. Competitive bidding offers a better solution, but only if we are willing to give it a chance.

For the second year in a row, Rep. Paul Ryan (R-Wis.) has advanced a comprehensive budget plan that would restructure Medicare and Medicaid, repeal the big-spending portions of the Affordable Care Act (ACA), and ultimately resolve the fiscal crisis facing this country. 

Market pricing would cut Medicare costs.

Panelists discuss competitive pricing in Medicare.