Medicare Reform:

Ensuring Fiscal Sustainability While Modernizing the Program Will be Challenging

T-HEHS/AIMD-99-294: Published: Sep 22, 1999. Publicly Released: Sep 22, 1999.

Additional Materials:

Contact:

William J. Scanlon
(202) 512-7114
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

Pursuant to a congressional request, GAO discussed efforts to reform the administration, structure, and financing of the Medicare program.

GAO noted that: (1) in March, the Bipartisan Commission on the Future of Medicare completed its deliberations; (2) reform options emerged from these discussions that touched on all aspects of the Medicare program, including: (a) modernization of the traditional Medicare fee-for-service program both to update the benefit package and enhance its potential for containing program costs; (b) modernization of the Medicare Choice program to ensure beneficiaries health plan choices and allow the program to more efficiently purchase plan services; and (c) adoption of a Federal Employees Health Benefits Program-like model to foster quality and price based competition among health plans and to elevate beneficiary consciousness about and responsibility for program costs; (3) given the size of Medicare's unfunded liability, it is realistic to expect that reforms intended to bring down future costs will have to proceed in an incremental fashion; (4) ideally, the unfunded promises associated with today's program should be addressed before or concurrent with proposals to make new ones, such as adding prescription drug coverage; (5) if additional benefits are added, policymakers need to consider targeting strategies and fully offsetting the related costs; (6) they may also want to design a mechanism to monitor these and aggregate program costs over time as well as establish expenditure or funding thresholds that would trigger a call for fiscal action; (7) in addition, any potential program expansion should be accompanied by meaningful reform of the Medicare program to help ensure its sustainability; (8) to qualify for meaningful reform, a proposal should make a significant down payment toward ensuring Medicare's long-range financial integrity and sustainability; (9) the 1999 annual reports of the Medicare Trustees project that program costs will continue to grow faster than the rest of the economy; (10) proposals to reform Medicare should be assessed against the following criteria: affordability, equity, adequacy, feasibility, and acceptance; (11) the particulars of payment mechanisms largely determine the extent to which a reform option can eliminate excess government spending while protecting beneficiaries' access to care; (12) revisions to newly implemented policies should be based on a thorough assessment of their effects so that they are not unduly affected by external pressures and premature conclusions or remain static when change is clearly warranted; and (13) for choice-based models to function as intended, consumers must have information that is sufficiently comparable.

Oct 6, 2014

Oct 2, 2014

Sep 29, 2014

Sep 23, 2014

Sep 18, 2014

Sep 16, 2014

Sep 9, 2014

Sep 8, 2014

Looking for more? Browse all our products here