Medicare reform proposals would benefit from more information

Nov 6, 2012, 9:53 a.m.

What's Medicare reform all about?

Medicare reform means different things to different candidates for elective office. For those of an age eligible for Medicare, dramatic reforms are often an omen of doom, not a welcome change. Everyone should examine the major points of proposed Medicare reforms. Decide which of these ideas make sense and those that may not.

The Obama Administration's basic overhaul plan

Review and reduce subsidies to Medicare Advantage plans

The rationale is that the government is overpaying private insurers for this supplemental coverage. The government estimates its over-payment at 14 percent more, up to 20 percent, for this coverage than for the same beneficiary in the classic Medicare system.

The government's contention is that these overpayments are not improving the quality of care. Government believes that those insured by Medicare are not receiving any extra quality benefits from this overpayment.

Eliminating these extra government subsidies could save over $100 billion for taxpayers and Medicare beneficiaries over the upcoming 10 years. These savings provide extra support for the Medicare Trust Fund, ensuring its long-term survival. This is the current administration's position on Medicare reform for seniors.

Mitt Romney's vision of Medicare reform

Honor commitments, without changes, for current Medicare beneficiaries. Those nearing retirement would keep the same promised benefits.

Create a "premium support system" for future Medicare participants. President Obama compares this to a "voucher system." The challenger's reform plan is to offer a fixed amount to future seniors, to be used to purchase any insurance plan they choose. All eligible insurance plans must, at a minimum, offer comparable coverage to Medicare plans. Should seniors select more expensive coverage, they would pay the difference from their own funds.

Under this plan, the government would continue to offer Medicare as another option to selecting a private insurer. Under this proposal, lower income seniors would get more "support"--as in money--while wealthier seniors would receive less "support."

The primary focus of this proposal is to a) create competition among health plans, and b) save money for taxpayers and the government. Both plans may require a change in Medicare provider forms of delivering care for reimbursement or payment.

With both Medicare reform proposals, a few significant questions face seniors.

Would either reform plan change the age eligible for Medicare coverage for future participants?
Will either proposal change Medicare provider forms of delivering care?
Which reform plan, if any, would help, rather than hurt, seniors in the "now" and in the future?

Until these questions are answered, seniors and those about to enter this group may be rather ambiguous about both proposals. Quality of care versus senior out of pocket cost is a factor that needs further explanation.

Do you agree that seniors need more information before jumping on either Medicare reform bandwagon? Or, do you have a preference for either plan, not necessarily, a candidate, with the information currently available? Would it help your evaluation if you had access to further information about candidate plans for reform of Medicare health coverage?

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