Medicare’s Chief Actuary: Choice & Competition Have Successful History

House Budget Committee Chairman Paul Ryan held a hearing on February 28, 2012 with Richard Foster, the Chief Actuary for the Centers for Medicare and Medicaid Services and Stephen Goss, the Chief Actuary of the Social Security Administration.

RYAN: I want to get into "competitive bidding." As you may know I've been working across the aisle with a member of the Oregon delegation from the senate on a premium support plan that uses competitive bidding to help determine the contribution. Competitive bidding we've seen has worked well in Medicare Part D and Medicare Advantage, I'd like to get your thoughts on choice and competition as it relates to these previous successful reform plans. Given what we've seen in these aspects of Medicare, do you believe that competitive bidding is a process that can be successfully applied Medicare-wide?

FOSTER: Yes I think it can. Obviously it would represent a large change from the status quo. But I think it could work. We've seen the signs of this — you mentioned the Part D prescription drug program, for example, where the different drug plans compete against each other on the quality of their benefit package and the premium level. And we've seen every year since Part D started, a migration of beneficiaries to more efficient plans with lower premiums. So that can help.

We've also seen for durable medical equipment that competitive bidding, in this particular area of Fee-For-Service Medicare, reduced prices that we had to pay by 40%.

RYAN: By forty percent?

FOSTER: Forty percent, that's right.

RYAN: Those are the kinds of cost-savings we're going to have to achieve if want to continue to make good on the promise of the Medicare guarantee.

6 thoughts on “Medicare’s Chief Actuary: Choice & Competition Have Successful History

  1. Ryan is still trying to do damage control a year after his joke of a budget
    destroyed his reputation. He is trying to turn medicare into a voucher
    program and he is trying to destroy medicare so he can give the Koch Bros a
    tax cut.

  2. 30 yrs serving seniors down the crapper due to this FLAWED program. They
    are picking winners and losers with no regard to service and outcomes. It
    is all about the lowest bid and not even that, I believe they are singling
    out private and independent providers for exclusion. I despise these
    hypocrits, I employ 5 full employees time for less then the salary of Nancy
    Pelosi not counting ill gotten gains through insider trading and under the
    table deals.

  3. ~~*It took 30 yrs for Republicans to systematically KILL THE AMERICAN
    DREAM. Who can trust a party whose #1 STATED GOAL is to deny Obama a second
    term? The GOP has given us TWO MONEY LAUNDRYING WARS ON THE NATIONAL CREDIT
    CARD, EPIC ECONOMIC COLLAPSE,THE TRICKLE DOWN ECONOMIC FALLACY ,REVENUE
    DEPLETING BUSH TAX CUTS, THE WRATH OF ALL NATIONS , THE DUMBING DOWN OF
    AMERICANS,etc,etc….. Now PAUL RYAN, REPUBLICAN HIPSTER DOFUS, has made it
    his life’s mission to DENY US MEDICARE!..ENOUGH!

  4. @mrgravyx What is your plan to solve the problem? Ryan is the only one
    actually addressing substantial cuts. How is he destroying medicare if his
    plan does not affect anyone aged 55+ at the present? If it means adjusting
    the current system for +10 future retirees so that it is sustainable to the
    taxpayer I am all for “destroy”-ing Medicare as you claim it.

  5. Nice to here one of my Senators cares enough for our country to reach
    across the isle on this very important issue. Keep up the good work.

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