A former Clinton administration official went to Capitol Hill to drum up support for a proposal for saving Medicare.

Alice Rivlin, who was director of the Office of Management and Budget under President Clinton, recommended today at House Budget Committee hearing on health and retirement security that Congress replace the current basic Medicare program with a system that would have Medicare enrollees choose from private Medicare plans sold through a new Medicare Exchange.

Rivlin developed the Medicare Exchange proposal together with Rep. Paul Ryan, R-Wis., the chairman of the Budget Committee.

Today, she said, private insurers usually sell Medicare Advantage products through one-on-marketing.

“A more formal exchange could make it easier for beneficiaries to compare and select among the plans available to them in head-to-head comparisons, reduce sales and marketing costs of the plans, and create better value for enrollees,” Rivlin said, according to a written version of her remarks on the Medicare Exchange and other ideas provided by the Budget Committee.

The new Patient Protection and Affordable Care Act (PPACA) rules requiring carriers to spend at least 80% of individual revenue on health care and quality improvement efforts or else pay a rebate could help, by giving Medicare Exchange carriers the legal authority to give enrollees an incentive to be efficient by cutting their premiums.

Under the current rules, efficient plans can improve benefits but cannot cut premiums, Rivlin said.

Rivlin also talked about a number of other Medicare proposals she and colleagues have developed, including a proposal for having enrollees pay a higher percentage of the premiums and modernizing Medicare’s benefits structure.

Trustees for the Medicare hospitalization fund say that fund will be insolvent within a few years, and that the Medicare outpatient and physicians’ services, which has no trust fund, will consume an ever-increasing share of the U.S. gross domestic product unless Congress changes the program.

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