Publications by Judy Feder for Health Policy Center

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More about Judy Feder's areas of expertise can be found on this Urban Institute expert's page.

Proposals to replace traditional Medicare with "premium support"-or vouchers for the purchase of private insurance or, in some cases, Medicare-have once again emerged on the political agenda. This critical commentary on the Rivlin/Domenici proposal (markedly similar to the Ryan/Wyden proposal) finds much wanting in premium support—in particular, that Medicare already provides benefits more equitably and at lower cost than private insurance; that without "regulatory teeth", premium support would actually create coverage inequities and increase costs; and that implementation of the Affordable Care Act's payment and other Medicare reforms, not Medicare replacement, ought to be the nation's top priority in controlling overall health costs. These remarks were presented at a Brookings Institution forum on December 16, 2011.

The Congressional Budget Office, the Rand Corporation, and the Urban Institute have estimated that the Affordable Care Act (ACA) will leave employer-sponsored coverage largely intact; in contrast, some economists and benefit consultants argue that the ACA encourages employers to drop coverage thereby making both their workers and their firms better off (a “win–win" situation). This brief's analysis shows that no such "win–win" situation exists and that employer-sponsored insurance will remain most workers' primary source of coverage. Analysis of three issues-the terms of the ACA, worker characteristics, and the fundamental economics of competitive markets-supports this conclusion.

At 40 percent of Medicare's and of Medicaid's costs, the 9 million dual eligibles who receive benefits from both programs, are a focus of efforts to slow growth in entitlement spending. But, given the two programs' responsibilities, policy-makers are relying far too heavily on states to find the solution. Dollars spent on dual eligibles are overwhelmingly federal; potential savings come from better management of Medicare-financed acute care services; and enhanced state, rather than federal, responsibility for overall spending increases the risk of cost-shifting to Medicare and may undermine quality of care for vulnerable beneficiaries.

As of July 1, 2011, the higher matching rates that states have received from the federal government because of the severe recession came to an end. The likely result is a reduction in benefits and provider payments or an increase in taxes, or both. Either action would have adverse effects on the U.S. economic recovery. In this editorial, Judy Feder and John Holahan argue that enhanced matching rates should be continued. In the interest of long-run debt reduction, these extra federal payments should be budget neutral to federal government over a period of years. That is, when the economy recovers, federal matching rates would be reduced to make up for the higher federal payments in the near term.

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