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Presidential Issues: Entitlements & Welfare

Entitlements & Welfare

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Jeb Bush’s Plan to Reform Medicare

November 9, 2015

By John R. Graham

Jeb Bush's Medicare reform contains two proposals — premium support and Health Savings Accounts — that will have a significant, positive effect on seniors' access to care and Medicare's finances. In particular, the proposals will address four flaws in Medicare Advantage, an alternative to traditional Medicare in which seniors choose a plan from a private insurer.

Although Obamacare tried to cut seniors' access to private plans, the use of these plans continues to grow. Before Obama took office, one-quarter of beneficiaries chose Medicare Advantage plans. Today, about one-third do. But despite their popularity, private Medicare plans do not live up to their potential for cost-effectiveness.

The first major flaw of Medicare Advantage is that its costs are deliberately hidden from seniors. Their premiums pay a small share of costs, while federal taxpayers shoulder the rest behind the scenes. In Bush's premium-support plan, by contrast, all seniors are given a fixed amount of taxpayer money up front, which they can put toward a plan (including traditional Medicare if they desire). This means that seniors will know how much taxpayers are supporting them.

Read the full article at RealClearPolicy.com: Jeb Bush's Plan to Reform Medicare