by Robert E. Moffit, Rea S. Hederman
The Heritage Foundation
February 03, 2014
Backgrounder
A major report by the Congressional Budget Office (CBO) confirms that premium support (a defined-contribution system of health-plan financing) would make the financially troubled Medicare program more sustainable. In a new competitive system of health plans, the CBO finds that private health plans can offer the same benefit and services as traditional Medicare fee-for-service plans—at a lower cost to taxpayers. The CBO report also reveals that competition can drive lower beneficiaries’ premiums and out-of-pocket costs. The CBO analysis affirms the potential of serious savings for Medicare beneficiaries and taxpayers alike. It also encourages a growing number of analysts who promote premium support as the single best option for comprehensive Medicare reform.



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