CBO proposes premium support system for Medicare

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The Congressional Budget Office has proposed using a premium support system for Medicare to save the government money and to encourage competition between private health plans and the traditional fee-for-service Medicare program.

A CBO report suggests that the federal government give beneficiaries an amount to be used to purchase Medicare's current fee-for-service coverage or Medicare insurance from a private provider. The assumption is that the savings will come when beneficiaries enroll in the lower cost plans. Savings could be contingent on how many beneficiaries switch to the less expensive plans, the CBO said.

See the report, "Designing a Premium Support System for Medicare," at
www.cbo.gov/showdoc.cfm?index=7697&sequence=0&from=7