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Questions and Answers about Turning Medicare into a Premium Support System

With its inclusion in the House GOP health plan released last month, the idea of converting Medicare into a premium support system once again features prominently in Capitol Hill policy discussions about the future of Medicare, the federal health insurance program that covers 57 million seniors and people with disabilities. A new brief from the Kaiser Family Foundation helps inform the debate by examining some frequently asked questions about premium support. This approach, generally speaking, aims to reduce Medicare spending growth by providing a set annual payment on behalf of each Medicare beneficiary toward the purchase of a health insurance plan, increasing competition among plans and providing stronger incentives for beneficiaries to be cost-conscious in plan selection.

The brief does not analyze a specific proposal but rather explains the concept of premium support and explores how it might save money, as well as how it might affect Medicare benefits, beneficiaries’ premiums and out-of-pocket costs, low-income beneficiaries, doctors and other health care providers, private Medicare plans and traditional Medicare.

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Filling the need for trusted information on national health issues, the Kaiser Family Foundation is a nonprofit organization based in Menlo Park, California.