The Rivlin-Domenici plan was introduced by the Bipartisan Policy Center’s Debt Reduction Task Force, chaired by Dr. Alice Rivlin, former budget director in the Clinton administration, and former Sen. Pete Domenici (R-N.M.). Their report, “Restoring America’s Future,” was released Nov. 17, 2010. It was updated in an article by Rivlin and Domenici in a report released in December 2011 at the Brookings-Heritage Fiscal Seminar, titled, “Premium Support: A Primer.”
Summary of key Medicare reforms in the Rivlin-Domenici Plan:
• Beginning in 2018, transition Medicare to a premium support program that provides enrollees with a payment to purchase private health care plans on a new federally run and regulated Medicare exchange.
• Set the federal premium support contribution equal to the cost of the second-cheapest approved plan or fee-for-service (FFS) Medicare in each area, whichever is cheaper. Limit growth in the premium support payment to the growth in overall consumer prices plus 1 percent, as compared to current projected excess cost growth rate of gross domestic product (GDP) plus 1.7 percent.
• Require private plans to cover services with at least the same actuarial value as FFS Medicare, and adjust premium revenue up (or down) if they attract patients whose illnesses are more (or less) expensive than average.
• Maintain traditional FFS Medicare as a default option, but charge beneficiaries higher premiums if costs rise faster than the established limits.
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