In fact, it would be fair to say that virtually everyone who has taken a serious look at the Medicare program’s cost problems (which also date from the inception of the program) has come to the same conclusion. Instead of basing the program’s contribution to premiums on the cost of care in the traditional FFS health plan, the government contribution should be based on bids from competing health plans, including both private plans and traditional FFS Medicare. Jessica Vistnes and her colleagues at the Agency for Healthcare Research and Quality found that offering multiple health plans with a level dollar contribution to premiums minimized total healthcare costs compared to offering only one plan. Roger Feldman at the University of Minnesota recently estimated that premium support would result in immediate savings to the Medicare program of 9.5 percent of total program cost–5.6 percent more than the provisions in President Obama’s Affordable Care Act.
Source: Bryan Dowd writing in The American.