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AMA Adopts Policy Aimed at Strengthening Medicare for Current and Future Generations

For immediate release:
Nov. 14, 2012

Chicago – The American Medical Association (AMA), the nation's largest and most influential physician group, voted today at its semi-annual policymaking meeting to adopt policy recommending a set of principles that should be included in a Medicare defined contribution system that would enable beneficiaries to purchase the coverage of their choice from among competing health insurance plans, including traditional Medicare.

“With robust patient protections in place to help the most vulnerable beneficiaries, a defined contribution program can help ensure the sustainability of Medicare for current and future generations,” said AMA President-elect Ardis D. Hoven, M.D. “This policy provides the framework to create the needed balance of access, affordability and financing and allows seniors the choice of coverage options that include both traditional Medicare and private insurance plans. We will continue to explore the effects of transitioning Medicare to a defined contribution program on cost and access to care.”

The defined contribution framework described by this new policy would be similar to the health insurance program for federal employees, including members of Congress. Traditional Medicare, with improvements like caps on out of pocket spending, would remain an option for all Medicare beneficiaries.

Competing private plans would be subject to regulations to ensure beneficiaries were protected from eroding benefits and increasing out-of-pocket costs and would have access to reliable and meaningful health insurance coverage. Private plans would be required to provide coverage that is at least the actuarial equivalent of the benefit package provided by traditional Medicare and would be required to meet guaranteed issue and guaranteed renewability requirements.

Defined contribution amounts would be set at the value of the government's contribution under traditional Medicare. Lower income and sicker beneficiaries would receive larger defined contributions to ensure affordability of coverage for all beneficiaries. Contribution amounts would be adjusted annually based on changes in health care costs and the cost of obtaining health insurance so that the value of a Medicare defined contribution remains stable over time.

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Media contact:
Shannon (O'Brien) Breymaier
AMA Media Relations
(312) 464-4443


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