Restructuring Medicare: The False Promise of Premium Support

Research Report

Restructuring Medicare: The False Promise of Premium Support

Abstract

Proponents of restructuring Medicare to a premium support system claim that the current program is inefficient, unable to control spending growth, and “going broke.” This issue brief challenges those characterizations and explores the shortcomings of the premium support approach. First, we demonstrate that the supposedly dire financial situation of Medicare has been greatly exaggerated. Second, we show that premium support could reduce beneficiary choice of health plans. Third, we show that Medicare Advantage works well because plans can pay hospitals and providers at or near Medicare payment rates. Finally, we describe how premium support proposals have evolved over time.

Research Area: 

Centers

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