2020 Election’s Healthcare Debate: Truths, Half-Truths, And Falsehoods

https://www.forbes.com/sites/joshuacohen/2019/07/08/2020-elections-healthcare-debate-truths-half-truths-and-falsehoods/#57fb72076466

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are may emerge as the number one issue in the 2020 election. In itself this isn’t surprising, given that for many decades the electorate has considered healthcare a key issue.

And, the truth is healthcare access continues to be a major problem in the U.S., along with inequalities in outcomes, relatively high prices for healthcare services, and high out-of-pocket spending. Democratic presidential candidates have weighed in on these issues.

Without more clarity, however, the debate runs the risk of unraveling into exercises in sophistry.

Politicians in America have had a knack for telling half-truths or even untruths about healthcare. For example, in 2012, John Boehner claimed that “the U.S. has the best healthcare delivery system in the world.” And, just prior to signing the Affordable Care Act (ACA) into law, President Obama stated “if you like your healthcare plan, you can keep it.”

Many constituents — myself included — are also confused by certain terms used in the current debate.

Democrats appear to all want universal coverage. Among the presidential candidates there are different ideas about how to achieve the objective. One group, led by Vermont Senator Bernie Sanders, wants a single payer system, misnamed “Medicare for All.” When Sanders and others talk about Medicare for All, they aren’t aiming to expand the currently existing Medicare program to include all U.S. residents. Rather, they’re talking about a government program that would replace all currently existing forms of insurance, both private and public. Sanders’s plan would also substitute premiums and out-of-pocket spending with taxes. Whether this single payer system would result in lower healthcare costs for individuals – paid in the form of premiums and out-of-pocket costs, or taxes – remains to be calculated.

When Sanders and others speak of eliminating private insurance and replacing it with Medicare for All they ignore the fact that private insurance is embedded in many aspects of the Medicare program. For example, more than a third of Medicare beneficiaries are enrolled in a Medicare Advantage plan, and over 60% have their prescription drug coverage managed in stand-alone fashion by a prescription drug plan. So, in addition to the abolition of commercial private insurance, Medicare for All would radically alter the Medicare program as it operates today, which makes the name of Sanders’ plan all the more curious.

There are of course some things that presumably Medicare for All would do that the currently existing Medicare program does not, including coverage of long-term care expenses, hearing, dental, vision and foot care.

A number of candidates have proposed tinkering with the existing system by expanding Medicare eligibility, i.e., Medicare for More, and still others have proposed including a “public option” to augment ACA. Regarding the former, certain groups of people — for example, those over age 50 — would be offered the opportunity to purchase Medicare. And, in the ACA-plus scenario, certain individuals could buy into existing programs, such as Medicaid, state employee health plans, or an entirely new health plan run by the state.

One area of apparent consensus across the Medicare for All, Medicare for More, and ACA-plus camps is establishing a system in which there are lower reimbursement rates for healthcare services, which would drive down costs. Currently, there is a very sizable gap between Medicare and private health insurer reimbursement rates to hospitals and physicians. Medicare for All goes furthest in ratcheting down payments to essentially a single rate. By abolishing private insurance the rates would be reduced to Medicare levels, which are at least 40% lower. This, however, could prove to be problematic as such measures could force hospitals to close if they had to accept the rates currently paid by Medicare. Physicians would also stand to lose under a drastic rate reduction.

The healthcare industry is particularly opposed to Medicare for All because of concerns about disruption to the system – even undermining insurers’ raison d’être – and much lower reimbursement rates.

A frank discussion would be welcome regarding the implications of all proposals across the political spectrum, including ramifications of undoing the ACA. For too long, the healthcare debate on both sides of the aisle has shied away from explaining the consequences of policy proposals, or inaction for that matter.

 

 

The Lessons of Washington State’s Watered Down ‘Public Option’

Jay Inslee, the governor of Washington, signing a measure in May that puts the state on track to create the nation’s first “public option” health insurance.

Jay Inslee, the governor of Washington, signing a measure in May that puts the state on track to create the nation’s first “public option” health insurance.

A big health care experiment for Democrats shows how fiercely doctors and hospitals will fight.

For those who dream of universal health care, Washington State looks like a pioneer. As Gov. Jay Inslee pointed out in the first Democratic presidential debate on Wednesday, his state has created the country’s first “public option” — a government-run health plan that would compete with private insurance.

Ten years ago, the idea of a public option was so contentious that Obamacare became law only after the concept was discarded. Now it’s gaining support again, particularly among Democratic candidates like Joe Biden who see it as a more moderate alternative to a Bernie Sanders-style “Medicare for all.”

New Mexico and Colorado are exploring whether they can move faster than Congress and also introduce state-level, public health coverage open to all residents.

But a closer look at the Washington public option signed into law last month, and how it was watered down for passage, is a reminder of why the idea ultimately failed to make it into the Affordable Care Act and gives a preview of the tricky politics of extending the government’s reach into health care.

On one level, the law is a big milestone. It allows the state to regulate some health care prices, a crucial feature of congressional public option and single-payer plans.

But the law also made big compromises that experts say will make it less powerful. To gain enough political support to pass, health care prices were set significantly higher than drafters originally hoped.

“It started out as a very aggressive effort to push down prices to Medicare levels, and ended up something quite a bit more modest,” said Larry Levitt, senior vice president for health reform at the Kaiser Family Foundation.

So while Washington is on track to have a public option soon, it may not deliver the steep premium cuts that supporters want. The state estimates that individual market premiums will fall 5 percent to 10 percent when the new public plan begins.

“This bill is important, but it’s also relatively modest,” said David Frockt, the state senator who sponsored the bill. “When I see candidates talking about the public option, I don’t think they’re really grasping the level of opposition they’re going to face.”

During the Affordable Care Act debate, more liberal Democrats hoped a public option would reduce the uninsured rate by offering lower premiums and putting competitive pressure on private plans to do the same. President Obama backed it, saying in 2009 that such a policy would “keep the private sector honest.”

The public option came under fierce attack from the health care industry. Private health plans in particular did not look forward to competing against a new public insurer that offered lower rates, and fought against a government-run plan that they said “would significantly disrupt the coverage that people currently rely on.” The policy narrowly fell out of the health care law but never left the policy debate.

Congressional Democrats have started to revisit the idea in the past year, with health care as a top policy issue in the 2018 midterm elections.

“During the midterm elections, Medicare for all was gaining a lot of traction,” said Eileen Cody, the Washington state legislator who introduced the first version of the public option bill. “After the election, we had to decide, what do we want to do about it?”

Ms. Cody introduced a bill in January to create a public option that would pay hospitals and doctors the same prices as Medicare does, which is also how many congressional public option proposals would set fees. The Washington State Health Benefit Exchange, the marketplace that manages individual Affordable Care Act plans, estimates that private plans currently pay 174 percent of Medicare fees, making the proposed rates a steep payment cut.

“I felt that capping the rates was very important,” Ms. Cody said.“If we didn’t start somewhere, then the rates were going to keep going up.”

Doctors and hospitals in Washington lobbied against the rate regulation, arguing that they rely on private insurers’ higher payment rates to keep their doors open while still accepting patients from Medicaid, the public plan that covers lower-income Americans and generally pays lower rates.

“Politically, we were trying to be in every conversation,” says Jennifer Hanscom, executive director of the Washington State Medical Association, which lobbies on behalf of doctors. “We were trying to be in the room, saying rate setting doesn’t work for us — let’s consider some other options. As soon as it was put in the bill, that’s where our opposition started to solidify.”

Legislators were in a policy bind. The whole point of the public option was to reduce premiums by cutting health care prices. But if they cut the prices too much, they risked a revolt. Doctors and hospitals could snub the new plan, declining to participate in the network.

“The whole debate was about the rate mechanism,” said Mr. Frockt, the state senator. “With the original bill, with Medicare rates, there was strong opposition from all quarters. The insurers, the hospitals, the doctors, everybody.”

Mr. Frockt and his colleagues ultimately raised the fees for the public option up to 160 percent of Medicare rates.

“I don’t think the bill would have passed at Medicare rates,” Mr. Frockt said. “I think having the Medicare-plus rates was crucial to getting the final few votes.”

Other elements of the Washington State plan could further weaken the public option. Instead of starting an insurance company from scratch, the state decided to contract with private insurers to run the day-to-day operations of the new plan.

“It would have cost the state hundreds of millions of dollars just to operate the plan,” said Jason McGill, who recently served as a senior health policy adviser to Mr. Inslee. He noted that insurers were required to maintain large financial reserves, to ensure they don’t go bankrupt if a few patients have especially costly medical bills.

“Why would we do that when there are already insurers that do that? It just didn’t make financial sense. It may one day, and we’ll stay on top of this, but we’re not willing to totally mothball the health care system quite yet.”

Hospitals and doctors will also get to decide whether to participate in the new plan, which pays lower prices than private competitors. The state decided to make participation voluntary, although state officials say they will consider revisiting that if they’re unable to build a strong network of health care providers.

Most federal versions of the public option would give patients access to Medicare’s expansive network of doctors and hospitals.

Although Mr. Frockt is proud of the new bill, he’s also measured in describing how it will affect his state’s residents. After going through the process of passing the country’s first public option, he’s cautious in his expectations for what a future president and Democratic Congress might be able to achieve. But he does have a clearer sense of what the debate will be like, and where it will focus.

“This is a core debate in the Democratic Party: Do we build on the current system, or do we move to a universal system and how do we get there?” he said. “I think the rate-setting issue is going to be vital. It’s what this is all about.”

 

 

Why have Medicare costs per person slowed down?

https://usafacts.org/reports/medicare-cost-slowed-down-hospital-baby-boomers?utm_source=EM&utm_medium=email&utm_campaign=medicaredive

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The 65+ population now makes up 16% of the US population, up from 11% in 1980. In response to an aging population, Medicare costs are going up. Benefits totaled $713 billion in 2018, 25% higher than in 2009, and Medicare spending accounts for a fifth of all healthcare spending as of the latest year of data.

However, while program costs are increasing, there is an interesting counter-trend – the per person cost for insuring someone through Medicare has actually decreased.

In 2018, the overall cost of Medicare per enrollee was $13,339 per year, about $30 less than it was in 2009, adjusting for inflation. That’s even as benefits across Medicare totaled $713.4 billion, $144.4 billion more than in 2009.

Why are the costs of insuring someone through Medicare going down? A combination of demographics and policy changes may point to an answer.

THE AVERAGE MEDICARE BENEFICIARY IS GETTING YOUNGER

The average age fell from 76 to 75 between 2007 and 2017Enrollment in all types of Medicare increased 29% during that period from 44.4 million to 58.5 million.

That one year drop in average age is significant for Medicare costs.

An influx of Baby Boomers enrolling in Medicare is playing a role in slowing down an increase in costs for Medicare Part A, which funds hospital stays, skilled nurse facilities, hospice and parts of home health care. In 2008, the share of Original Medicare (Part A or B) beneficiaries who were 65 to 74 years old was 43%. In 2017, 65- to 74-year-olds made up 48% of beneficiaries, the group’s highest share in the 21st century.

A 2015 Congressional Budget Office study showed that we spend 73% more on an enrollee in the 75 to 84 bracket than we do on those in the 65 to 74 bracket.

Our analysis below show how demographics factor into Medicare costs, especially age.

In 2017, there were 38,347,556 Medicare Part A enrollees, making up 100.0% of total enrollees. The federal government spent $188,093,274,340 on program payments for this group, 100.0% of the total Total Part A program payments for this type of enrollee changed from $5,052 in 2013 to $4,905 in 2017, a -2.9% change.

With Medicare Part B there were 33,562,359 enrollees, making up 100.0% of total enrollees. The federal government spent $188,886,121,627 on program payments for this group, 100.0% of the total Total Part B program payments for this type of enrollee changed from $5,287 in 2013 to $5,628 in 2017, a 6.4% change.

 

Even Democrats prefer more moderate “Medicare for All”

https://www.axios.com/even-democrats-prefer-more-moderate-medicare-for-all-2fc79e20-70e7-47f1-890d-711ef0adeb92.html

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Allowing people to buy into Medicare is more popular than establishing a single-payer health care system — including among Democrats, according to a recent Navigator poll.

Why it matters: Bernie Sanders made “Medicare for All” a popular concept, but even its supporters have different ideas about what it entails. And more moderate versions have the upper hand.

Between the lines: Most people don’t have a nuanced understanding of health policy, and even within the same poll, different ways of describing the same policy yielded different results.

By the numbers: Even a majority of Republicans said that they would support a Medicare buy-in, when given a choice between that or single-payer.

  • In another section of the poll, though, a 40% plurality of Republicans said “expanding Medicare” was a bad idea, and 59% said that “Medicare for anyone who wants it” is a bad idea.

Yes, but: A version of Medicare for All that eliminates private insurance is still supported by a majority of both Democrats and independents.

  • 78% of Democrats said a “universal health care system” is a good idea, 76% said that a “‘Medicare for All’ program” is a good idea, and 52% said that a “single payer health care system” is a good idea.

What they’re saying: Polling aside, I think Medicare for All is what the American people want and need,” Sanders said in a brief interview.

  • “I think the vision of a simple, seamless system of health care where you have the care that you need, your loved ones have the care that they need…is very, very appealing. Many ideas are being presented for how do we get to that,” said Sen. Jeff Merkley, who has a Medicare buy-in proposal.

The bottom line: There’s plenty of opportunity to sway the health care debate, but moderate Democrats seem to have the most popular ideas right now.

 

 

 

 

Democrats Yet To Successfully Explain Medicare For All

https://www.forbes.com/sites/brucejapsen/2019/05/26/from-bernie-to-warren-democrats-yet-to-successfully-explain-medicare-for-all/#3e8b63126daf

 

Kaiser Family Foundation Medicare For All briefing on national public healthcare plan approaches introduced in Congress (May 21, 2019).

Even with two dozen Democrats running for President and most touting an expansion of Medicare benefits to everybody, the public is still unclear how a national single payer health plan like “Medicare for All” will benefit them.

A briefing from experts at the nonpartisan Kaiser Family Foundation for health reporters last week revealed there are five general approaches to expanding coverage involving public plans.

Within those approaches are 10 national plans introduced in Congress that include everything from a single payer version of Medicare for All that would uproot private coverage to a “public program with an opt out” that would be offered along side commercial coverage. Other plans would allow Americans to buy into Medicare as young as 50 years old or buy into Medicaid coverage for the poor.

But no matter the effort to expand health insurance coverage, much is to be done to educate the public at large even as single payer supporters like Sens. Bernie Sanders, Elizabeth Warren and Kamala Harris push Medicare for All on the campaign trail.

“Our polling shows some Americans are unaware of how the implementation of a national health plan could impact them,” said Mollyann Brodie, Kaiser’s senior vice president and executive director, public opinion and survey research. “For example, many people (55%) falsely assume that would be able to keep their current health insurance under a single-payer plan.”

Democrats on the campaign trail hoping to challenge President Donald Trump should Republicans nominate him to run for re-election in 2020 see rising support for a national health plan that would make the government the only insurance carrier.

Kaiser data shows 56% favor a national health plan “in which all Americans would get their insurance from a single government plan.” Just 40% favored such a national health plan 20 years ago, Kaiser data shows.

“Our polls have shown a modest increase in support for the idea of a national health plan,” Kaiser’s Medicare for All presentation showed. Some of these health insurance expansions would be single payer versions of “Medicare for All’ like that proposed by Sanders in the U.S. Senate and Rep. Pramila Jayapal (D-Washington) in the U.S. House of Representatives that would uproot private coverage and replace it with government run Medicare.

Other public approaches would involve a “public program with an opt out” known as Medicare for America or a “Medicare Buy in” like that proposed by Sen. Debbie Stabenow (D-Michigan). Other public plans would involve a so-called “federal public plan option” that would be offered along side commercial coverage on a government exchange and there are also Medicaid buy-in proposals being floated in a number of states.

Politically, the lack of knowledge of Medicare for All and public option proposals offers opportunities for both Democrats who favor Medicare for All and Republicans who want to derail a government expansion of health benefits, particular an approach that would essentially replace much of the private system.

“As the public learns more about the implications of each of these proposals, support may increase or decrease,” Kaiser’s Brodie said.