Abstract
DJOURNMENT OF THE BIPARTISAN COMMISSION ON THE Future of Medicare without a proposed solution to Medicare’s long-term solvency problems created a small tempest in Washington. The eye of the hurricane was a proposal to introduce more market competition into Medicare by converting it into a premium-based insurance plan. Under the proposal, the federal government would pay a defined portion of the premium for a standard benefit package, and the beneficiary would pay the rest. The failure of the proposal, known as premium-support, to attract a consensus among the commissioners triggered a promise by its sponsors to introduce it as legislation in Congress. That promise certainly will be kept, although the current budgetary battle may delay the date of introduction. 1 Indeed, this proposal will be highlighted as a counterpoint to the president’s Medicare proposal in the ongoing Medicare debate. Therefore, an analysis of its likely effects is essential in understanding this proposal and defining a framework for evaluating any alternatives that might emerge.
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