Preserving Medicare for the Next 50 Years

For 50 years, Medicare has managed to provide seniors with continuous coverage and a strong measure of financial security. Now, in the 21st century, it is time for reforms that will not only improve Medicare to secure value for patients, but also enhance the program’s solvency and reduce its growing burden on current and future taxpayers. Left unreformed, Medicare will continue to put intense pressure on the federal budget, contribute to coming deficits, and generate massive future debt. But there are grounds for optimism. Medicare has used new systems of defined contribution for payment of comprehensive private health plans and prescription drug coverage, and both programs have demonstrated the benefits of consumer choice and genuine competition. Congress should now take the final step and subject hospital and physician benefits to the same intense market forces of personal choice and provider competition that today govern private plans and prescription drugs. Reform would reduce bureaucracy and red tape, further stimulate innovation in benefit design and care delivery, and help to secure fiscal wellness for both the program and the nation.