Barak Richman writes on systematic change to health insurance

richmanWriting for the New England Journal of Medicine, KIE Senior Fellow Barak Richman (Law) co-authored an examination of defined-contribution versus defined-benefit plans and problems with proposed legislation to  change how Medicare is funded and operated.

Despite its appeal, the Wyden–Ryan plan had a fatal flaw: it proposed to base the government’s defined contribution on current Medicare costs and to increase the contribution at an annual rate of 1% above the growth in the gross domestic product (GDP) — a generous contribution, from a public perspective, since it would outpace economic growth. But whereas the GDP has historically grown at a rate of approximately 2.5% annually, Medicare has grown at a rate of 8.2% annually over the past 15 years.