Medicare: Options for Reform: T-HEHS-99-130

May 1999
GAO Reports;5/26/1999, p1
Government Documents
Budgetary pressures and public concern have forged a consensus that major reforms are needed if Medicare is to be sustainable in the future. Medicare reform proposals have generally focused on two areas: expanding Medicare's benefit package and containing costs. Two commonly discussed benefit expansions are the inclusion of a prescription drug benefit and coverage for extraordinary out-of-pocket costs, known as catastrophic coverage. Financing reforms include modernizing the fee-for-service program and the Medicare+Choice program and adopting premium support for Medicare fashioned after the Federal Employees Health Benefits Program. In reforming Medicare, attention should be paid to lessons learned from recent experience in implementing reforms mandated by the Balanced Budget Act of 1997, particularly regarding new payment mechanisms, provider behavior in evolving markets, and Medicare+Choice information initiatives.


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