US AMA To Re-Present Its Medicare Reform Plan

Hoping that the new US Congress and President Clinton will be more receptive than in the past, the American Medical Association plans to re-present its Medicare reform proposal. This calls for a 7% annual premium increase in exchange for a wide choice of health care plans, assuring the solvency of the program for the next 15 years and stopping the slide in payments to doctors.

In 1995, the AMA said its plan would provide $162 billion savings over seven years; it now says a similar amount would be saved, with $20 billion coming from the higher premium payments. Additional savings would come from fostering competition among health care providers with whom Medicare beneficiaries would be encouraged to enroll, the AMA said.

The program would be modeled after the current system available to federal employees, who can choose coverage options from a variety of health care providers. The plan also calls for those with incomes over $50,000 per year to pay more for Medicare and would try to stop cuts in payments to doctors who treat Medicare patients. The current reimbursement formula calls for doctors to reduce Medicaid spending by 4% per year or risk not having reimbursements adjusted for inflation. The average reimbursement is set to fall from $36.28 per patient visit this year to $35.95 in 1997. The AMA would also allow overall Medicare spending to grow by the rate of annual growth in Gross Domestic Product plus 2%, which would allow for annual expansion of about 3.5%.