All these proposals have one thing in common: they try to slow the rate of growth of Medicare by shifting costs to the beneficiaries. If government spends less on the health care of current retirees, the retirees will have to make up the difference out of their own pockets. If the government spends less on the next generation of retirees, young people will have to prepare to spend more of their own money during their retirement years. For example, the Lieberman/Coburn proposal would:
Increase the age of eligibility for Medicare from 65 to 67, phased in over a period of years;
Increase out-of-pocket deductibles (although increasing protection against catastrophic expenses).
Increase means testing, so that wealthier retirees would pay for more of the cost of their coverage.
Although each of the proposals is "bipartisan," the left regards them as essentially Republican ideas. In a sense they are right. These are basically eat-you-spinach reforms. They are all pain no gain. They shift costs to people without giving them any new tools to be able to bear the increased burden they will be asked to carry.
Here is a better (and more palatable) idea: combine the spending cuts with a set of new tools that makes it easier for the beneficiaries to bear the burdens. I believe seniors would accept higher deductibles and co-payments under Medicare, provided that we do other things to help them make health care more affordable.
Former Medicare Trustee Thomas Saving and I recently proposed nine ways to empower seniors in the medical marketplace. They include allowing Medicare beneficiaries to use the services of walk-in clinics, urgent care centers, surgi-centers and doc-in-the-box outlets. Each of these services costs less than traditional care. That’s why they exist. They are mainly catering to patients who are buying care with their own money. Most do not accept Medicare patients because Medicare’s fees are too low.
Saving and I proposed to let Medicare pay whatever fee other patients are paying. Barring that, let the senior top up Medicare’s fee to pay the market price. Since the fees charged by a walk-in clinic are less than the fees charged by a primary care physician’s office or a hospital emergency room, this proposal would make medical care more affordable. And since walk-in clinics are usually easy to get to and involve very little waiting, this proposal would make care more accessible.
For young people a similar principle applies. In return for reducing future spending under Medicare, young workers need to be able to save in a tax free account to be able to pay for more of their own care once they reach retirement.
In general, people will accept less from government, provided they are given new freedoms to provide for themselves.
John C. Goodman is President and CEO of the National Center for Policy Analysis, Senior Fellow at The Independent Institute, and author of the acclaimed book, Priceless: Curing the Healthcare Crisis. The Wall Street Journal and National Journal, among other media, have called him the "Father of Health Savings Accounts." He is also the Kellye Wright Fellow in health care. The mission of the Wright Fellowship is to promote a more patient-centered, consumer-driven health care system.
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