Earlier this month I speculated that Gail Wilensky might be favorable to competitive bidding among plans participating in Medicare. My reading of her piece in the New England Journal of Medicine is that she is. In it, she describes how to morph Rep. Ryan’s plan into a competitive bidding system that includes traditional, fee-for-service Medicare. Here’s the key passage:
[T]he subsidy must be sufficient for purchasing at least one available health plan in each geographic area at whatever percentage of premium coverage is assumed to be appropriate at the outset. Although an important policy decision must be made regarding subsidy levels, let us assume that the subsidy would be expected to cover 75% of the cost of a premium for coverage of the benefits currently available to seniors. […] Thus, at least one plan would have to be available in each geographic area for which the Medicare subsidy would cover 75% of the premium. […]
[C]onsideration should be given to making traditional Medicare available on a premium basis, so that the subsidy could be used to buy it as well as private plans. Since traditional Medicare will be available anyway as long as Americans who are currently 55 years old are alive, continuing Medicare as a choice, as a defined-contribution plan, might be a politically important compromise.
More on competitive bidding in many posts.