NCPA - National Center for Policy Analysis

Bush�s Medicare Reform

June 5, 2003

The Bush administration is proposing the most sweeping improvements in Medicare since the program's inception in 1965, says John C. Goodman, president of the National Center for Policy Analysis.

These reforms would increase seniors' choices, reduce their financial risk and help rein in escalating costs. However, the administration is also proposing an expansion of senior entitlements (and thus taxpayer burdens) averaging more than $1,000 per year per beneficiary over the next 10 years.

This cost is far more than reform requires. Moreover, the expense of the additional entitlements will grow over time, offsetting much of the long-term benefit the administration hopes to achieve through Social Security reform.

The Bush plan has three main elements.

  • First, seniors who remain in traditional Medicare would receive a prescription drug discount card that could reduce out-of-pocket costs by 10 percent to 25 percent; they also would receive protection against catastrophic drug expenses.
  • Second, seniors could choose among private sector plans offering more generous benefits, in a program modeled after the current health plan for members of Congress and other federal employees.
  • Finally, seniors could enroll in managed care plans that provide still more benefits, continuing an option many have today.

So far the plan is only an outline, giving those who fill in the details considerable discretion, says Goodman.

Source: John C. Goodman, "The Bush Medicare Reform Plan," Brief Analysis, #444, June 5, 2003, National Center for Policy Analysis.

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