So that nobody will recall
Their toxic single payer
That hasn’t a fiscal prayer;
Too bad it is identical.
PARSING
THE RHETORIC OF MEDICARE FOR ALL
Advocates of public health insurance have
recently taken to naming their proposed legislation “Medicare [fill in the
blank].” “Medicare Part E,” “Medicare for All,” “Medicare X,” “Medicare Extra,”
and the “Medicare Buy-In and Health Care Stabilization Act of 2017” (Medicare
Buy-In for short) are all bills or legislative proposals that follow this
template. By naming a proposal after the popular program, the authors are
seeking to communicate that their legislation expands Medicare or, at the very
least, that their proposal is basically Medicare. But is that
really the case? If so, what does that mean for the Medicare program itself?
PROPOSALS THAT WOULD DIRECTLY AFFECT MEDICARE
Despite the frequency with which policy makers
are naming their proposals after Medicare, only two of the programs above
directly alter Medicare: Medicare Buy-In and Medicare for All. Medicare Buy-In would allow
people between 50 and 64 who are not otherwise eligible for Medicare to
purchase Medicare coverage. The proposal states that the beneficiaries’
premiums would be equal to the average, annual per capita cost of benefits
payable under Parts A, B, and D, plus the applicable administrative expenses.
It is unclear whether buying into Medicare at full price would be appealing to
a diverse pool of consumers, as multiple studies have noted such plans would
likely be subject to adverse selection, which leads to higher premiums and
a riskier pool of buyers. Many potential enrollees are also already eligible to
receive subsidized plans in the Affordable Care Act individual market with a
higher actuarial value than Medicare. Without extra premium subsidies, it is
probable that the Medicare Buy-In proposal would lead to relatively small
enrollment and negligible effects on the Medicare program as a whole.
On the other hand, Medicare for All would set up
the “Universal Medicare Program” that would, over time, replace every other
source of insurance in the country. In particular, it would end Medicare as we
know it. The Medicare Hospital Insurance Trust Fund would be liquidated and
every dollar (along with those from the other public health programs’ trust
funds) would be transferred into a “Universal Medicare Trust Fund.” While the
Universal Medicare Program retains the Medicare name, it is unclear whether the
benefits provided under the program would reflect current Medicare benefits.
The bill is light on the details of the program’s provided benefits and gives
the Secretary of Health and Human Services the responsibility of regulating
benefits, negotiating drug prices, establishing formularies, and making various
other decisions. Studies by the Mercatus Center and the Center for Health and
Economy have found this legislation would cost $32.6 trillion and $34.67 trillion over ten years,
respectively.
PROPOSALS WITH NO DIRECT EFFECT ON MEDICARE
Every other proposal or piece of legislation
mentioned above creates a program that is separate from Medicare and therefore
would not directly affect Medicare. The other three proposals mentioned
above—Medicare Part E, Medicare Extra, and Medicare X—are all variations of a
proposal for a public option in the individual market along with increased
premium tax credits, cost sharing reductions, and eligibility for both.
Regardless of the isolated effects of a public option, federal spending is
certain to increase for each of these plans because of the generosity and scope
of the benefits prescribed.
What do these bills and proposals mean for the
future of Medicare and its beneficiaries? Despite the authors’ collective
desire to keep these proposals separate from Medicare while using the name,
even these bills could affect seniors’ care. For example, each one sets up a
public option where providers are compensated based on Medicare’s rates, which
are substantially lower than the rates of
private insurance. A higher ratio of provider services reimbursed at Medicare
rates could lead to a reduction in the number of physicians and the services
they offer, an increase in the number of patients providers take on from
private insurers, or an increase in the prices providers negotiate from private
insurers.
THE BIG PICTURE
On a larger scale, such plans affect Medicare
because they affect the federal budget. Medicare was never designed to be
self-financing, and it relies heavily on general revenue from the Treasury. In
2017, Medicare had a cash shortfall of $352 billion, which
represented nearly half of the federal deficit for the year. Medicare is a
popular program, but the rate at which it spends money is currently unsustainable. Creating more
unfunded public programs would increase the strain on the federal budget,
create more competition with Medicare for general revenue, and thus threaten
its future even further. Before trying to expand Medicare, policymakers should
push to ensure it exists at all for future generations.
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