Premium support is back. What is it?


http://theincidentaleconomist.com/wordpress/upshot-premium-support/

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http://theincidentaleconomist.com/wordpress/wp-content/uploads/2017/02/premium-support.pdf

A number of Republican health care policy proposals that seemed out of favor in the Obama era are now being given new life. One of these involves Medicare, the government health insurance program primarily for older Americans, and is known as premium support.

Right now, the federal government subsidizes Medicare premiums — those of the traditional program, as well as private plan alternatives that participate in Medicare Advantage. The subsidies are established so that they grow at the rate of overall per enrollee Medicare spending. No matter what Medicare costs, older Americans can be sure that the government will cover a certain percentage of it. That’s the main thing that panics fiscal conservatives, because that costs the government more each year.

Premium support could quiet that fear. Subsidies would be calculated so they don’t grow as quickly, thus protecting the federal government (that is, taxpayers) from runaway spending. There are lots of variants, but there are really two principal ideas.

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