Making Medicare More Efficient


Can the free market save Medicare? The results to date aren’t very encouraging: Medicare Advantage, a program that allows seniors to enroll in private health plans, costs taxpayers about 13% more per person than standard fee-for-service Medicare. But wait! Austin Frakt reports that in some areas MA is more expensive than FFS and in other areas FFS is more expensive than MA. So why not switch to a system where both kinds of plans bid against each other, and reimbursement rates are set differently for each area depending on who submits the lowest bid?

More here, and the AEI study it’s based on is here. The AEI folks claim it would reduce Medicare costs about 8% nationwide. Seems worth a closer look.

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