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Panel Issues Final Report Assessing Role of Private Health Plans in MedicareAn independent panel of the National Academy of Social Insurance (NASI) issued its final report on the role of private insurance plans in Medicare on November 3. The non-partisan panel was composed of 12 experts with varied backgrounds and political leanings, and was chaired by Mark Schlesinger, Ph.D., Associate Professor of Public Health. The panel’s mandate was to determine how the inclusion of private insurance plans in Medicare has impacted Medicare beneficiaries, and to make recommendations for improving the functioning of private insurance plans within Medicare. One of the panel’s central findings was that “Medicare beneficiaries are not all alike,” said Schlesinger. Some are relatively healthy, have sharp minds, and are capable of making choices and navigating changes in the provision of health care. People in this group may benefit from being able to choose private insurance plans. However, Medicare beneficiaries who are disabled, of advanced age, or have chronic health problems are more likely to have cognitive and physical difficulties that make managing their health care within a private insurance plan difficult. This group is likely to be better served by traditional, fee for service Medicare (FFS Medicare), which provides more stability in the provision of health care. To improve the overall quality of FFS Medicare, the panel recommended providing a prescription drug benefit and capping beneficiaries’ annual out-of-pocket costs. Both benefits are offered by many private insurance plans and would decrease the financial vulnerability of those Medicare beneficiaries who live on fixed incomes or have chronic health problems. The panel’s most controversial recommendation involved the issue of how to improve the functioning of the market in which FSS Medicare and private insurers operate. Congress is currently debating whether FFS Medicare should compete directly with private insurance plans through bidding to determine what insurers will pay health care providers for various services (right now, the payments private insurers make to providers are based on what FFS Medicare pays providers for those services). Proponents of the approach argue that it will reduce existing geographic disparities in Medicare spending and help to control costs. The panel, by a large majority, recommended against such direct competition, predicting that sicker people would be covered by FFS Medicare and that its costs would therefore increase, creating the possibility of premium increases that would make the program unaffordable. The panel concluded that both FFS Medicare and the private insurance plans with which it contracts are necessary because each meets different needs and each has different strengths and weaknesses from which lessons can be drawn to improve the other. In a political climate in which many Republicans favor having FFS Medicare compete directly with private insurers and many Democrats favor keeping FFS Medicare largely as it is, Schlesinger says that the report is an attempt “to take ideology out of the debate.” NASI is a nonprofit, nonpartisan organization that promotes informed policymaking about social insurance and related programs. The full text of the panel’s report can be found at: http://www.nasi.org/publications2763/publications_show.htm?doc_id=197700&name=Medicare. -Story by Christy Gordon. Sources:
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