Medicare is based on the cost of seniors' health care being borneprimarily by younger workers. The demographic reality is there arediminishing numbers of workers per senior. Promises to today's andfuture beneficiaries must be kept, but not at the expense of futuregenerations. Building incentives for high quality, efficient caredirectly into the Medicare payment structure and using the power ofpersonal choice and competition are key reform elements.
Projections of Medicare's future debt obligations are staggering.Even without any prescription drug benefits, current participantswill be owed $13 trillion. New generations, whose taxes should bepaying off current obligations, will impose another $25 trillion indebt to the system. Reformers should consider adopting features ofthe Federal Employees Health Benefit Program (FEHBP), whichemphasizes consumer choice and competition among health plans andhas successfully controlled costs for decades.
Medicare reform is an unavoidably hot topic for Congress and theAdministration. Fundamental restructuring of this vital program iscritical to its long-term fiscal health, as well as to improvingthe quality of care delivered to America's seniors.
Congress and the Clinton Administration have the unprecedentedopportunity to enact into law a reform of Medicare that willaddress the program's long-term benefit and deep-seatedshortcomings.