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MedPAC Recommends New Part B Pricing System

By MedPage Today  
   April 07, 2017

The commission also heard a presentation on possible responses in case Congress and the Trump administration decide to institute a Medicare premium support program, in which Medicare beneficiaries would receive a set amount of money from the federal government to purchase one of several health insurance plans offered to them. Commission staff member Eric Rollins outlined several ideas:

  • The Medicare fee-for-service program should remain available and be treated like a competing plan
  • The use of a standard benefit package or another form of standardization would make it easier for beneficiaries to understand their options
  • Plans offered should have flexibility to include alternate forms of cost-sharing and to offer extra benefits
  • Beneficiaries would need good decision support tools to make informed choices
  • Competitive bidding should be used to set benchmarks
  • The base premium should be similar to the Part B premium

The effects of a premium support plan are "highly uncertain," according to Rollins, who added that the effects would vary across areas. Some beneficiaries would switch to lower-cost plans, but it's not clear how many, he said.

Commissioners expressed concern about the idea. "I worry about Medicare becoming too much of an income-related program, which undermines the whole point of social insurance," said commissioner Kathy Buto, MPA, a health policy expert from Arlington, Va. If low-income beneficiaries can only go to certain providers because they are in a lower-cost plan, "we are creating a two-tiered system of care."

Commission chair Francis Crosson, MD, a retired physician from Los Altos, Calif., emphasized that although MedPAC was looking at what to do if premium support were implemented, it was not endorsing the idea. "Going in that direction is not the position of the commission," he said. "We simply attempted to say... that based on the fact that others are thinking about this and it's our responsibility to provide facts and advice if we can, that we would do that service. But we have not taken a position about moving from traditional Medicare to this model."

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