Is Medicare C for All the Answer?
April 27, 2017 12:28
It seems as though Congress would fix our ailing health-care system. But their plan was more concerned with tax cuts for the rich than coverage for the poor. Perhaps it deserved to fail.
It would appear without full, universal coverage at an affordable price, (single payer) we as an economy face major financial downside. Leaving Obamacare to “explode,” as the Mr. Trump puts it, is not the answer. Some 30 million of us already have zero coverage. Tens of millions more face that prospect if major insurance companies continue to abandon Obamacare.
Clearly, some of us simply don’t care that others are uninsured- that it's not the US government's responsibility. That is up to our individual beliefs. The problem is, the government got into health care subsidization a long time ago, and as the government's participation in health care spending as grown, so has the cost of health care. Other reasons for the astronomical increase in health care costs- we live live longer, we sit more, we eat poorly, we have more stress. In other words, the American lifestyle is generally less healthy that it used to be.
But the government remains a driving force in the rising cost of health care and health insurance. After all, it's the government for pete's sake. Whatever they involve themselves with, costs rise exponentially. Just look at higher education.
Fortunately, the government's most recent failures in health care present a rare opportunity to get Democrats and Republicans to work together. Put Democrats and Republicans in a room, and they might agree on, maybe, Medicare Part C for All.
Politically speaking, Medicare has joint parentage. Parts A and B are Democratic initiatives. Parts C and D are Republican. Traditional Medicare combines Parts A, B and D. Part C, also called Medicare Advantage, is an alternative. Part C participants enroll with an insurance company, which is often a health-maintenance organization. The company then covers the participant for what’s covered under traditional Medicare.
The government pays the chosen insurer. The payment is based on the expected costs of covering the participant for the year. This calculation incorporates the participant’s pre-existing conditions as well as geographic location. Participants can switch insurers annually.
Because they get a fixed payment, which includes a profit margin, for each Part C participant, insurers have an incentive to neither underprovide nor overprovide care. Underprovide, and their customers won’t re-enroll. Overprovide, and their costs rise. Either way, the insurer’s profits fall.
Part C has been around since 1997. It’s popular. One in three Medicare participants — 17.6 million people — are in Part C. That’s up from 5.3 million in 2004. Hence, we have a tried-and-true federal system already in place to deliver universal health care.
Best yet, both parties can embrace Medicare Part C for All. Since the poor are sicker on average, this plan is highly progressive- Democrats love that. But setting a fixed amount per participant imposes a budget on what Uncle Sam spends. It also improves incentives and promotes competition. Finally, it gets employers out of the health-insurance business. Those are things the Republicans want.
Sen. Bernie Sanders campaigned on traditional Medicare for all. Surely he and other Democrats would prefer Medicare C for All to the current system. As for the Republicans, Medicare C for All is very close to the bill sponsored by Rep. Pete Sessions, R-Texas, and Sen. Bill Cassidy, R-Louisiana. (It’s also my Purple Health Plan in drag.)
Who pays? We all would pay via our progressive income tax and Medicare premium systems, plus copays (regulated and capped) charged by Advantage plans. Moreover, wages now paid as employer-provided health-insurance premiums will be taxed. Finally, all federal and state funds spent on Medicaid and Obamacare would be available to cover Medicare C for All.
As for making the transition politically palatable, those over 60 could be grandfathered under current Medicare rules (i.e., be given access from age 65 on to traditional Medicare).
And employers could maintain their plans, but without any tax break. Eventually, everyone would be in C. This will eliminate the big problem with C, namely C participants switching to traditional Medicare to overuse the health-care system.
If you like this solution, make it happen. If you don’t, push a reasonable alternative. Unfortunately, you can’t afford to sit on your hands.
None of us can sit back and watch this train wreck. We all need to get into the weeds, decide precisely what health-insurance system our country needs, and lobby Congress accordingly.