A Medicare buy-in plan for parts of the country was proposed by Senators Michael Bennet and Tim Caine. Pointing out that health care that’s not affordable or contains extravagant co-pays isn’t usable–they want to give people who live in certain areas the ability to enroll in the government program. Policies would provide maternity, pediatric and newborn care, and hospitals and doctors would be reimbursed at 125% of the standard Medicare rate. They would start in areas where the insurance exchange offers “one or no options” and in counties where: the price is high, there aren’t enough doctors or there’s a lack of competition. After 4 years they would make Medicare insurance “available to small businesses and to individuals.” Each state’s department of health care services and state health commissioners would create the rates. There would still be three tiers of service, and federal goodies like tax credits would remain. The plan would allow each state to negotiate the price of drugs covered by MedicareD. Administrative costs would be paid for by medical premiums.1
A community where more doctors and competition did NOT help keep costs down, McAllen Texas is a poor border town and is “one of the most expensive health-care markets in the country.” It had more than its share advanced technology and highly trained doctors, but based on outcomes, the results here were average. In the opinion of one of the towns displeased surgeons, medical care was over utilized. Tests and surgeries were performed for marginal indications. And medicine had become too much of a business. The town’s newest hospital was physician owned. It’s owners denied claims that they recruit high volume physicians and that physicians “receive not only their fee for whatever service they provide but also a percentage of the hospital’s profits from the tests, surgery, or other care patients are given.5 ”
Four steps that were needed if the affordable care act was going to be used to provide universal coverage, per Matthew Fiedler and 4 health policy experts:
For starters they would use a “carrot and a stick”–financial incentives and penalties to convince “wayward” states to offer Medicaid coverage to people whose incomes were below 138 percent of poverty. Second: they would offer tax credits and subsidies to the uninsured whose incomes were below 400% of poverty and to people whose workplace policies came with excessively high co-pays. (They pegged the number of U.S. residents who didn’t have “coverage” in 2019 at 9%.) Third: They would “streamline enrollment procedures” for people eligible for Medicaid or CHIP who hadn’t done the paper work. Fourth: They would do what corporations do when they have a big stock offering. They would create backstop insurance. If some of the stocks and bonds intially offered for sale are not sold on the open market, the investment firm that is handling the transaction has to buy them. Fiedler et al. would similarly subject the high income, uninsured to backstop insurance. (As described in the prior segment) When one of these people receives emergency care, the hospitals and doctors would be paid by the government. At income tax time the IRS would extract an appropriate “backstop” insurance premium fee.
The group didn’t have an answer for the one sixth of the country’s residents who were undocumented, but they thought the nation needed to create a path to citizenship. They didn’t believe their modifications would increase the amount the government had to kick in.2
MEDICARE-FOR-ALL– The “damn bill” Bernie Sanders wrote and 106 members of the House of Representatives are sponsoring . In an interview Sanders explained that his plan would eliminate private insurance, co-pays and premiums.
The person conducting the interview pointed out that an independent analysis suggested his plan would cost $34 trillion the first decade. Taxes will go up.
Sanders didn’t disagree but countered that another analysis concluded that if we do nothing– over the same time period we will spend $50 trillion dollars. “We spend twice as much per person as the Canadians and many other countries in the western world.”
When health care is paid for by taxes, individuals will no longer spend $15,000 a year for premiums. “If a person ends up in the hospital and gets a bill for 50-80 thousand dollars –that’s gone. Co payments are gone. Out of pocket expenses are gone. The average American will pay less for care.”
Sanders would phase in his plan. “Over a four year period we would expand the most popular health plan in this country—Medicare.” The first year he would cover dental care, hearing aids and eye glasses, and he would lower the eligibility age to 55. The following year 45. The next year 35. “Then we cover everybody.6 ”.
The Sanders bill– As “unpacked” by Katie Keith in Health Affairs March 3, 2019: (details below–reference 8) Every resident of the United States would be entitled to health care benefits; the bill would prohibit charging deductibles; coinsurance, copays, or similar fees for covered services. All standard health care that is part of the HHS national practice guidelines would be included.8
Elizabeth Warren would automatically enroll people under 50 in medicare. If they prefer other coverage THEY CAN DECLINE. She “identified trillions in revenue to finance a fully functioning Medicare for All system – without raising taxes on the middle class by one penny” (detailed in elizabethwarren.com)
Her plan BEGINS as high-quality public insurance that covers 90% of costs. It ALLOWS people to utilize improved ACA subsidies to PURCHASE coverage and reduce cost sharing. No premiums for kids under 18 or for people at or below 200% of the federal poverty level. People with earnings greater than “200% FPL, will pay a premium that gradually increases as a percentage of income, and is capped at 5.0% of income. Starting in year one, the plan will NOT have a deductible – but there will be caps on out-of-pocket costs. “In subsequent years, premiums and cost sharing will gradually decrease to zero.”
With regard to the 160 million people who get insurance through their work. If workers with employer coverage opt IN, their employer will pay an appropriate fee. Unions can NEGOTIATE TO INCLUDE a move to the Medicare for All option via collective bargaining. If they do their employers would pay a discounted contribution and pass the money they save to workers in the form of increased wages etc.”
It’s health insurance that doesn’t have high co-pays so peope can use it. (some of today’s policies are un-use-able in the absence of a catastrophe due to high co-pays.) It’s not Medicare for all who want it– but Medicare for all — UNLESS THEY DON’T want it. People don’t opt in. Bu if they have insurance they want to keep they can opt out.3
My path summarized: Private insurers work on a risk adjusted basis. If you live in a flood zone you can’t get flood insurance or it’s too expensive. Taking affordable insurance away from the low risk young and healthy would be–like taking away a “right”. Politically it’s a loser or “socialism”. (The French leader Macron’s attempt to “reform” the country’s pension system—a program many workers think of as a “hard earned” right, has prompted a “cacophonous response. Everyone is angry.”)
For-profit companies are a significant driver of the high cost of health insurance. The Affordable Care Act allows insurers to keep 15-20 percent of the premiums for stockholders, bonuses etc. They call it the Medical Loss Ratio. (When the companies pay doctors and hospitals more than Medicare does, then raise the cost of premiums, their gross income goes up– and they get to keep 15-20% of the extra money.)
I would: A. allow people with pre existing illness access Medicare. (We’ve done it before. On October 30, 1972, the U.S. government chose a very expensive pre-existing condition (advanced renal–kidney failure) and made its care a “right”, paid for by Medicare. )
B. Give people over 50 access to Medicare; let those who wish join. They would need to pay for an age and income adjusted premium.
B. Raise the Medicare (payroll) tax rate for wages above $150-200,000.
C. Each year decrease the ‘Medical Loss Ratio’—the amount insurance companies get to keep by 2-5%. When it goes below 8% insurers will bow out –or not.
DRUG PRICES: –When drugs are approved by the FDA they have to be safe and relatively effective. -In addition I’d require the FDA at the very time they approve a drug for sale in the U.S. –to establish the medication’s list price according to a formula.
The amount charged should be based on a company’s real cost (including promotion and a percentage of company research) and a generous profit.
BUT my formula would NOT include development and creation costs paid for by charities and the taxpayer. And they can’t include the billions of dollars companies spend when they buy one another. (See the book for details.) And future price hikes should not exceed inflation.
- https://www.kaine.senate.gov/press-releases/kaine-bennet-introduce-medicare-x-to-provide-low-cost-high-quality-care-in-every-zip-codehttps://www.scribd.com/document/361849867/Bennet-Kaine-Medicare-X-Choice-Act-Summary
- HOW TO ACHIEVE UNIVERSAL COVERAGE: Brookings Institute Group led by Matthew Fiedler Ph.D N Engl J Med 2019; 380:1685-1688 https://www.nejm.org/doi/full/10.1056/NEJMp1901532
- (Dylan Scott@dylanlscottdylan.scott@vox.com Nov 15, 2019 https://www.vox.com/policy-and-politics/2019/11/15/20966674/elizabeth-warren-medicare-for-all-plan-public-option
- https://www.iii.org/fact-statistic/facts-statistics-industry-overview
5. The Cost Conundrum by Atul Gawande. New Yorker May 25, 2009
6. PBS NewsHour. October 22, 2019 https://www.youtube.com/watch?v=WwnBlqUTQi0
7. https://www.healthaffairs.org/do/10.1377/hblog20190302.150578/full/
8. Medicare would pay for: All hospital services (including inpatient and outpatient hospital care, emergency services, and inpatient prescription drugs); ambulatory patient services;
- primary and preventive services (including chronic disease management);
- prescription drugs, medical devices, and biologics;
- mental health and substance abuse treatment services (including inpatient care);
- laboratory and diagnostic services;
- comprehensive reproductive, maternity, and newborn care; pediatrics;
- oral health, audiology, and vision services;
- rehabilitative services and devices;
- emergency services and transportation;
- early and periodic screening, diagnostic, and treatment services covered under Medicaid;
- transportation to receive health care services for persons with disabilities or low-income people (as determined by the Secretary); and
- Long-term care services and support.
Doctors can’t bill or contract with people who are eligible for Federal insurance.
There’s a long term care benefit.
All the money that currently flows to Medicare, Medicaid, government employees, and a few other programs would end up in a “Universal Medicare Trust Fund”. “The proposal doesn’t say If the bill passed the companies would presumably exit the market.4
According to the insurance information institute, in 2017 health insurers generated revenues of $670.1 billion. If the bill passed the companies would presumably exit the market.
The first five years of the program one percent of the money would be used to help displaced health insurance-related workers.
The proposal contains a technique for determining salaries, operating expenses, administrative costs, and much more. The federal department of Health and Human Services (HHS) would annually negotiate the prices to be paid for covered pharmaceuticals, medical supplies, and medically necessary equipment. The bill goes into a lot of detail about how these would work.
If the Secretary could not successfully negotiate an appropriate price for a drug, he or she could authorize a “competitive license”. The original manufacturer would receive “reasonable compensation”. Drug manufacturers will be forbidden from engaging in anti-competitive behavior.
States would be allowed to set additional standards with respect to eligibility, benefits, and provider standards so long as these standards do not restrict eligibility or reduce access to benefits or services.
The bill would establish an Office of Primary Health Care within the Agency for Healthcare Research and Quality.
There’s a 2 year transitional Medicare buy-in option for U.S. residents under the age of 19 or 55 or older, or who are currently enrolled in Medicare.