NCPA - National Center for Policy Analysis

Should GOP Rescue Breaux's Medicare Plan?

March 19, 1999

Some political analysts are suggesting that Republicans should take up the Medicare rescue package that Sen. John Breaux (D-La.) and his commission developed -- and which was unceremoniously rejected by President Clinton.

In order to save money, the Breaux plan would:

  • Gradually raise the eligibility age from 65 to 67.
  • People could join the existing Medicare plan or use a premium allowance to purchase private health-care coverage.
  • Those who cannot afford to purchase prescription drugs would have them provided.

One of the greatest contributors to skyrocketing Medicare costs, economists say, is that the current system encourages seniors to consume greater amounts of health care. Medicare price controls also harm the quality of care -- ultimately driving up the cost of treating the sickest and most costly consumers.

Breaux bases his system on Minnesota's Buyers Health Care Action Group -- an alliance of companies that gives their 200,000 employees cash to purchase insurance and information on the price, convenience and performance of 26 doctor-formed networks or care systems.

The group also improves the quality of care for chronically ill patients by adjusting what it pays doctors based on the greater needs of a sicker population -- rather than giving doctors a flat-rate reimbursement for each patient.

Source: Robert M. Goldberg (Ethics and Public Policy Center), "Republicans Should Embrace Breaux's Medicare Plan," Wall Street Journal, March 18, 1999.


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