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 BidenJoe BidenFord to bolster electric vehicle production in multi-billion dollar push Protesters demonstrate outside Manchin's houseboat over opposition to reconciliation package Alabama eyes using pandemic relief funds on prison system MORE and Mayor Pete ButtigiegPete ButtigiegDo progressives prefer Trump to compromise? DOJ sues to block JetBlue-American Airlines partnership On The Money — Presented by Wells Fargo — Pelosi plows full speed ahead on jam-packed agenda MORE 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.