The Seniors’ Choice Act, by Sens. Richard Burr (R-N.C) and Tom Coburn (R-Okla.), is also known as the Burr-Coburn proposal.
In 2016, the Burr-Coburn proposal, in a competitive bidding process at the regional level, would introduce a premium support option to compete with Medicare’s traditional fee-for-service (FFS) option. All plans would be required to offer benefits actuarially equivalent to the prior year’s Medicare benefits. There would not be specific benefit packages for new Medicare plans, but all plans would be required to cover basic hospital, surgical, physician and emergency care.
The Burr-Coburn proposal would:
Increase premiums for Medicare beneficiaries by 3 percent of program costs, beginning in 2013, until a 9 percent target is reached in 2016;
Increase cost-sharing for wealthier seniors;
Charge full premiums for those with annual incomes of more than $1 million;
Prohibit Medicare Supplement Insurance (Medigap) plans from covering the first $500 of a senior’s cost-sharing, and put a limit on coverage above $500 to 50 percent of the next $5,000 of Medicare cost-sharing;
Impose a maximum limit on seniors’ out-of-pocket expenses to $7,500.
While there would be the creation of a privatization/premium support option, the proposal would retain traditional Medicare (Medicare Health Insurance (Part A) and Medicare Medical Insurance (Part B)) as a default option.
Regarding beneficiary payments, the plan states that premium support payments will be “tied to” average bids, but does not specify what “tied to” means; furthermore, the proposal does not nclude a cap on spending growth for premium support beneficiary payments[LS2] .
The Burr-Coburn plan also proposes a gradual increase in the age of eligibility for Medicare by two months each year, beginning with people who were born in 1949 (who will turn 65 in 2014) until the eligibility age reaches 67 for people born in 1960 (who will turn 67 in 2027).
Sens. Coburn and Burr estimate that their proposal will reduce Medicare spending by between $300-$500 billion over the next decade. However, information on health care spending is not available, as the proposal has not yet been evaluated by the Congressional Budget Office.
The plan would use a portion of any savings generated to freeze physician payments at current rates for the near future. This would provide a “bridge” for Sustainable Growth Rate (SGR) payments until the new Medicare premium support model they propose is implemented.
The plan would also immediately repeal the Affordable Care Act’s (ACA) Independent Payment Advisory Board (IPAB).
How Does Burr-Coburn's Seniors’ Choice Act Compare To Other Medicare Reform Proposals?
What Are Economists' Views on Burr-Coburn's Seniors' Choice Act?
Is There More Than One Plan to Reform Medicare?