Medicare actuary says premium support model still viable


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Foster said "there's some interest" among policy experts in both parties, many of whom have supported some kind of premium support model in the past. Critics say the proposal put forward by Rep. Paul Ryan (R-Wis.) and adopted by House Republicans goes too far because it doesn't give seniors a chance to keep traditional Medicare and its premium support level is too low.

"There's nothing fundamentally wrong with that," Foster said. "Now, would that be enough? Because when you think of the drivers of healthcare costs, a lot of it is technology and we all want the best technology. What we can probably do without is technology that is 1 percent better than the old technology but costs 10 times as much."

During his presentation, Foster reiterated his skepticism that the cuts to hospitals called for in Democrats' healthcare reform law will occur. But Urban Institute President Robert Reischauer, a Medicare trustee and former director of the Congressional Budget Office, said the law has a "back-stop" in the form of its controversial Independent Payment Advisory Board (IPAB), a panel of experts who will recommend cuts if Medicare costs rise too fast.

"I think it's fair to ask whether IPAB will get off the runway," he said, pointing to the difficulties in finding 15 qualified experts who are willing to take a pay cut and would be able to get confirmed by the Senate. Furthermore, Reischauer criticized limits in the provision that bar the IPAB from recommending higher revenues but instead forces it to focus on provider cuts.

"Their hands are tied, their feet are tied, and they're gagged," Reischauer said.

He went on to suggest that lawmakers and policy experts focus on solutions to ward off the pending shortfalls instead of worrying about the program's long-term fiscal health because of the uncertainty of long-term health costs and medical discoveries.

"I don't think anybody should spend sleepless nights worrying whether your grandchildren or your great-grandchildren will have a Medicare program to rely on," Reischauer said. "I think we should all be worried instead about how we're going to get through the next 15 years - how we're going to get from where we are now until the [hospital insurance] trust fund is exhausted. Because somewhere in that period some pretty profound changes are going to have to take place."