Lawmakers unveil major bipartisan Medicare overhaul

Democratic Sen. Ron Wyden of Oregon and Republican Rep. Paul Ryan of Wisconsin announced this week a new compromise plan that would structurally change Medicare and limit the federal government’s financial commitment to the program (Source: “Lawmakers Offer Bipartisan Plan to Overhaul Medicare,” New York Times, Dec. 15, 2011).

Under the plan, Congress would establish an insurance exchange for Medicare beneficiaries, where they would use federal subsidies to shop for private insurance plans. The exchange would also include the option of selecting a traditional Medicare plan. Subsidies would vary by region and be based on the second-cheapest option, whether that be a private plan on a Medicare plan.