BY KEN JANDA AND VIVIAN HO, OPINION CONTRIBUTORS
— 08/27/19 THE VIEWS EXPRESSED BY CONTRIBUTORS ARE THEIR OWN AND NOT THE
VIEW OF THE HILL
The
recent Democratic debates confirmed that universal access to health care
insurance is a core issue for the 2020 election, although it’s difficult
keeping up with all the proposals. "Medicare for All"
gets the most press, but its cost may be prohibitive, and
has no chance of surviving the health care industry lobbying in Congress.
Former
Vice President Joe Biden and Mayor Pete
Buttigieg want to bolster the Affordable Care Act by creating a new
“public option” within it. Sen. Kamala Harris has introduced a proposal to
include Medicare Advantage alongside the publicly
run Medicare program.
All of
these suggestions seem to involve huge risks, making a complex system even more
so. And from the Republican side, we have absolutely no proposals. So
where is the bold new idea that could actually happen? How do we build on
what’s already working well, cover everyone, simplify administration and find a
path that limits cost increases to the same rate as GDP growth or
lower? Maybe it’s time for “Medicare Advantage for All.”
Currently over 20 million Americans who
are eligible for Medicare have chosen the private insurance
alternative to
traditional Medicare called Medicare Advantage. That’s
about 35 percent of all Medicare-eligible seniors, and this percentage
rises every year. Most Republicans support Medicare Advantage,
including the Trump administration. Let’s build on that popular program’s
success.
Medicare Advantage plans are
individually selected by people based on cost, personal risk tolerance, network
provider options and customer service. Americans like choices, and Medicare Advantage offers
multiple choices along with a minimum safety net level of
coverage. Medicare Advantage plans avoid the confusion of Medicare Part A, Part B, Part D
and Medicare supplements since they cover
all those elements and usually more. Most seniors have more than a dozen
Medicare Advantage options to choose from. These plans cover all the
services and benefits of Medicare, often with lower deductibles and
copayments plus enhanced benefits. It’s no wonder these plans are popular. The
primary trade-off for the consumer is a requirement to utilize the carrier’s
contracted provider network, similar to what virtually all employer-sponsored
insurance requires. In fact, Medicare Advantage HMO or PPO plans
are offered by the same companies that provide individual and
employer-sponsored insurance around the country.
The
second rapidly growing segment of American health insurance is the
individual marketplace under the ACA. The
benefits offered in the marketplace, the companies offering those plans and the
way the Center for Medicare and Medicaid Services regulates those
plans is similar to Medicare Advantage. These markets could
easily be merged.
New federal regulations beginning in January 2020 will
allow employers to move away from picking a “one size fits all” group insurance
plan for their employees to a “defined contribution” approach. Employees would
use employer funds via a health reimbursement account to purchase an individual
policy under the ACA’s marketplace that, again, looks a lot like
a Medicare Advantage plan.
Over 80 percent of all Medicaid recipients are
currently enrolled in Medicaid managed care, where they choose a private
insurance company to provide all Medicaid benefits via an HMO network that, you
guessed it, looks a lot like a Medicare Advantage plan with
limited or no cost-sharing
We are
already on our way to Medicare Advantage for All, but we are not
doing it systematically or thoughtfully. A move
to Medicare Advantage for All is achievable in a relatively
short time frame, without the disruption and risk of Medicare for
All, or without the confusion of even more options and funding mechanisms. The
majority of Americans who have employer-sponsored insurance would still have
it. And Medicaid becomes mainstream.
All
Americans would have multiple choices of networks, carriers and benefit levels.
All Americans would have incentives for consumerism and healthy behaviors. Cost
growth would slow, as more people would receive coverage
under Medicare, with an average annual growth rate per enrollee of 1.5 percent since
2010 versus 4.5 percent for the privately insured.
No big
tax increases would be needed. Employers would continue to fund much of the
cost, just as they do in defined contribution retirement plans. We could
dramatically reduce the administrative burdens on patients and providers, as
the processes would be the same whether you are young, old, rich, poor,
subsidized or not.
With Medicare Advantage for
All, we would be building on and improving the current system rather than
blowing it all up and starting over. We could cover everyone, improve health
outcomes, improve patient experience and stop the increase in health costs
under Medicare Advantage for All. Republicans should love the
free market approach, Democrats should embrace the opportunity to improve the
ACA and Americans of all stripes should support a pragmatic and achievable path
to universal coverage. We hope something this reasonable will survive our
current political process.
Ken
Janda is the principal of Houston-based consulting firm Wild Blue Health
Solutions, adjunct professor at Rice University’s Jones Graduate School of
Business and a former health insurance CEO. Vivian Ho is the James A. Baker III
Institute Chair in Health Economics at Rice's Baker Institute for Public
Policy, director of the institute’s Center for Health and Biosciences and a
professor of economics at Rice.
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