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AMA’s Council on Medical Service Endorses Defined-Contribution Medicare



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NRO contributor Avik Roy (an outside Romney adviser) reports at Forbes on a fairly significant development for right-minded health-care reform: The American Medical Association’s policy-making body has, in broad terms, endorsed premium support. As he notes, the AMA has a variety of interests that make it hardly the best authority on structuring our health-care system, so conservatives have discredited its support for the Affordable Care Act, but this is still really important:

At the Vice-Presidential debate last week, Joe Biden claimed that the American Medical Association sided with him, and against Paul Ryan, on the merits of the Romney-Ryan plan for Medicare reform. “Who do you believe?” exclaimed Biden. “The AMA [and] me? A guy who has fought his whole life for this? Or somebody [like Paul Ryan]?” . . .

But this past weekend, the AMA’s key policy committee, the Council on Medical Service, voted to endorse a Medicare reform plan that shares key traits with the ones put forth by Mitt Romney and Paul Ryan.

“The [AMA] policy identifies changes that must be made to strengthen the traditional Medicare program (i.e., restructuring beneficiary cost-sharing, including modifying Medigap rules, and changing the eligibility age to match Social Security),” the Council writes, “and expresses support for giving beneficiaries a choice of plans for which the federal government would contribute a standard amount (i.e., a ‘defined contribution’) toward the purchase of traditional fee-for-service Medicare or another health insurance plan approved by Medicare. The Council firmly believes that implementing a defined contribution system, with strong regulatory protections for patients, is a responsible and feasible approach to strengthening the Medicare program.”

Much like the old Ryan plan, the AMA proposal would let the government provide a specified subsidy—the “defined contribution”—to retirees’ health benefits, and let them choose among a range of plans. Unlike the old Ryan plan, but like the current Romney-Ryan one, the AMA committee endorsed preserving “traditional Medicare as an option” for seniors.

The AMA Council’s report states that it came around to this view not at the behest of Republican operatives or candidates, but after speaking with Bill Clinton’s former budget chief, Alice Rivlin, who along with Paul Ryan proposed a version of this plan. “Dr. Rivlin emphasized that defined contribution amounts should be sufficient to ensure that all beneficiaries could afford to purchase health insurance coverage, and that private health insurance plans should be subject to regulations that protect patients and ensure the availability of coverage for even the sickest patients.”

Notable is not just that the AMA would like to see a defined-contribution rather than a defined-benefit model, but that they also favor raising the eligibility age along with Social Security’s, something Romney has proposed but Obama has refused to endorse. Roy has more about how the AMA’s plan compares with Romney and Ryan’s current proposal. 



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