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 <subject>Health insurance cost control</subject>
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 <title>Medicare Reform: Modernization Requires Comprehensive Program View</title>
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<abstract>The Medicare Program faces many challenges. Clearly, the
overarching issue is how to ensure that Medicare remains	 
sustainable for future generations of beneficiaries. Meeting that
challenge will involve difficult decisions that will likely	 
affect beneficiaries, providers, and taxpayers. However, the	 
financing issue should not obscure other important Medicare	 
challenges. Medicare&apos;s current cost-sharing arrangements do not  
encourage the efficient use of services without discouraging	 
necessary care. Moreover, the lack of catastrophic coverage can  
leave some beneficiaries liable for substantial Medicare	 
expenses. Finally, some aspects of Medicare&apos;s program management 
are inefficient and lag behind modern private sector practices.  
Changes in Medicare&apos;s program management could improve both the  
delivery of health care to the beneficiaries and the program&apos;s	 
ability to pay providers appropriately. Some view restructuring  
of the relationship between parts A and B as an important element
of overall Medicare reform. Fundamentally, assessing the program 
as a whole is an important first step in addressing Medicare&apos;s	 
challenges. Solutions to many of these challenges could be	 
crafted without restructuring. However, restructuring may provide
opportunities to implement desired reforms--with or without	 
unifying the Hospital Insurance and Supplemental Medical	 
Insurance trust funds--while undoubtedly raising issues that will
have to be considered.</abstract>
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<note>Testimony</note>
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