HIRP Research Brief

No. 5

Medicare Reform: A Model for National Healthcare Reform?
April 1996


Lynn Etheredge


The Medicare reform model in the Balanced Budget Act of 1995 deals with most of the major issues that arise in designing comprehensive health care reforms. In resolving these issues, the legislation proposes a grand compromise in which visions of competing private health plans and a social insurance program coexist, without government forcing acceptance of either approach. Rather, both social insurance (Medicare) and competing health plans are offered, allowing each individual to choose the financing-delivery system package that best meets his or her needs. The legislation also reflects astute balancing of many interests among providers, insurers, the elderly, and other gorups. The unresolved issue between this legislation and the Clinton administration's proposals mostly involve creating a level playing field between the Medicare program and private health plans, so that the public could choose between the best that the government and the private sector can offer. This paper addresses each of the major elements of the Medicare legislation and their potential application to national reform: social insurance and private health plans; market structure, health plans, and quality assurance; benefits; cost control; and financing for universal health coverage.

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