The Foreign Service Journal, November 2012

THE FOREIGN SERVICE JOURNAL | NOVEMBER 2012 75 AFSA NEWS AFSA Speaker Series: The Future of Medicare AFSA hosted the second session in its speaker series on federal benefits on Sept. 10. Dr. Judy Feder, a nation- ally recognized leader in health policy, spoke on the future of Medicare, a topic of much current interest. Feder provided a compre- hensive explanation of how Medicare works and how the Affordable Care Act comple- ments the program. She compared and contrasted Republican and Democratic proposals for the future of Medicare and assessed their impact for beneficiaries. “Medicare is effective at containing health costs for its beneficiaries. Because the program is such an enor- mous purchaser of health services, it has the power to set rates for health providers, rates that are generally 20 to 30 percent lower than costs for private health plans,” Feder said. “Because of the huge size BY BONNIE BROWN, COORDINATOR FOR RETIREE BENEFITS AND LEGISLATION of its risk pool, Medicare assures affordable health coverage for senior and disabled beneficiaries. These beneficiaries would have difficulty obtaining coverage if the risk pool were to be divided up, with insurance companies cherry-picking healthier and younger ben- eficiaries,” she went on to explain. Medicare now consumes 13 percent of the federal bud- get and its costs will continue to escalate. This increase will not be due to an increase in health costs, but to the expected enrollment of more than a million baby boomers to Medicare’s rolls each year. Feder noted that the ACA will reduce excessive health costs by $716 billion. Current savings have reduced growth of costs per person to an historic low (now roughly at the growth of the economy), and have extended the life of the Medicare Trust Fund by eight years, to 2024. The ACA’s Independent Payment Advisory Board is empowered to make ongoing rate reduction recommenda- tions in payments; it cannot make recommendations to cut or reduce health ser- vices. Feder predicted that continued coordination and experimentation will continue to improve quality of services and lower costs. Turning to the proposals to change Medicare from a defined benefit plan (which pays all covered services for its beneficiaries), to a defined contribution one (which provides beneficiaries with a voucher or specified amount of money to shop for private health plans), Feder stressed that beneficiaries in a defined contribution system would have little bargaining power. As the risk pool risk would be divvied up, it would become difficult for people to acquire affordable health coverage. The burden of increased health costs would shift from Medicare to individuals. As a related matter, she stressed that the proposal by Rep. Paul Ryan, R-Wisc., does not provide a mechanism for containing health costs. In fact, it projects a growth rate that would exceed the growth of the economy. After her talk, Dr. Feder answered the audience’s many questions on Medi- care, long-term care and the Federal Employees Health Benefits Plan. A video of the event is available for viewing at www. afsa.org/AFSAvideos.aspx. ■ The views expressed by Dr. Feder are her own and do not necessarily represent those of AFSA. PHOTOBYDONNAAYERST Dr. Judy Feder explains the intricacies of Medicare as she compared and contrasted Republican and Democratic proposals. Her talk inspires a lot of questions, as members of the audience stand in line to ask theirs. PHOTOSBYDONNAAYERST