BenefitsAll
Medicare For All (M4A)
June 27, 2019
Employers and individual purchasers have had few options for obtaining affordable, comprehensive health insurance and health care for decades. To address the unsustainable annual increases in health insurance premiums, deductibles, and health care prices, lawmakers at the federal and state levels have proposed several alternatives and enhancements to the private health insurance market. The various proposals, ranging from Medicare for All or single-payer to “tweaks” to the private and public health insurance markets, offer choices and opportunities to reduce out-of-control health care costs.
The various Congressional plans/proposal to address health care access and costs do not mention employer-sponsored health plans specifically. However, several plans would eliminate private health insurance, a product most employers rely on to offer health insurance to their workers.
Employers need to prepare for a future that might not include employer-sponsored health insurance (ESHI) as we know it.
The various Congressional plans/proposal to address health care access and costs do not mention employer-sponsored health plans specifically. However, several plans would eliminate private health insurance, a product most employers rely on to offer health insurance to their workers.
Employers need to prepare for a future that might not include employer-sponsored health insurance (ESHI) as we know it.
Health Care Reform Updates
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Medicare For All has morphed into an array of options that includes four (4) broad categories of health care reform proposals:
- Eliminate private health insurance and replace it with government-run health care
- Create a public option health care plan (limited eligibility)
- Allow individuals to “buy-in” to the Medicare or Medicaid programs (limited eligibility)
- Enhance the Affordable Care Act (aka Obamacare)
Medicare For All (M4A)
Only a total replacement of the health insurance and health care status quo will do for some people. Medicare For All purists propose eliminating private health insurance.
Medicare For All plans include mandated limits on medical care and prescription drug prices.
Most M4A proposals extend eligibility to all U.S. citizens and a few to U.S. citizens and non-citizens.
Medicare For All plans also eliminate health insurance premiums, health care deductibles, coinsurance, and most copay amounts. And the plans provide benefits most private health insurance plans do not, like comprehensive dental and vision care.
The primary source of funding for Medicare For All would be a tax. The tax would replace, not be in addition to, health insurance premiums, deductibles, and coinsurance amounts.
Lastly, Medicare For All would eliminate insurance networks. No more in- and out-of-network providers or balance billing.
Something to consider: No one knows what a Medicare For All system would look like. The federal-run Medicare and federal and state-run Medicaid programs cover less than 40% of Americans. A Medicare For All system that covers everyone would have the basic framework of these programs but on a much larger scale. A program that offers just one health plan to all combines simplicity, a sense of fairness, and an opportunity for cost savings that the current system does not and will never have. Medicare For All would require tradeoffs, and some would be painful for specific groups. The current health care system requires as many tradeoffs as any system that would replace it; however, the status quo is good at getting people to ignore the huge wholes in the system out of fear of the unknown.
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Public Option
A public option refers to a health plan offered by the federal or state government as an option on the health care reform (Obamacare) exchanges. The government may contract with a private health insurer to design and administer the plan, but the plan is government-sponsored and available to all eligible individuals. To date, Washington state is the only state that has signed legislation to offer a public option health plan. The Washington state bill has not been fleshed out. Issues such as eligibility, funding, and provider participation remain undefined. Meanwhile, there are several proposals for a federal public option plan, but no legislation has been passed.
The primary funding source for public option health plans would be individual monthly premiums, deductibles, coinsurance, copays, and, if eligible, government subsidies.
Public option plans look to lower health care costs by lowering premiums and deductibles in relation to private health insurance plans and tying medical care costs reimbursements to the Medicare or Medicaid reimbursement rates. In addition, these plans propose to change prescription drug reimbursement rates.
Something to think about Public option health plans requires the cooperation of medical care providers. Providers must agree to participate in the plan and accept a lower reimbursement rate than they receive from a private health insurance plan contract. The tradeoff for providers is that they may get more paying patients. A public option is one alternative to for-profit private health insurance, but it may not provide the savings purchasers need, especially those who do not receive government subsidies. Offering a public option plan would fill a gap in localities where one or no private health insurers offers an exchange plan.
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Buy-In
A few federal health care proposals allow individuals to “buy in” to the Medicare or Medicaid programs. Medicare is a federal health care program for the disabled and older people. Medicaid is a federal and state-funded administered health care program for low-income individuals. These programs are similar to the proposed public option health plan, but instead of creating a separate private health plan, a buy-in health plan uses the Medicare or Medicaid program.
The eligibility provisions of the buy-in health care proposals range from narrow to broad (individuals in underserved areas and small businesses to individuals not eligible for Medicare or Medicaid).
The primary funding source for public option health plans would be individual monthly premiums, deductibles, coinsurance, and copays.
Like its cousin, the public option health plan, buy-in health plans look to reduce costs by tying health care reimbursement rates to the Medicare reimbursement rate.
Something to think about: The Medicare and Medicaid buy-in plans have the same handicap as the “other” public option plans—how do you get providers to accept lower reimbursement rates compared to what they negotiate with private health insurance companies? One proposal to get providers to participate in the buy-in plans is to require providers that participate in Medicare to participate in these plans also. With the buy-in proposal, we can expect a lot of pushback from doctors and hospitals.
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ACA Updates
The Patient Protection and Affordable Care Act (aka Obamacare) extended health insurance to millions of people. Federal and some state governments set up marketplaces (aka, exchanges) where individuals could purchase a health insurance plan. Government subsidies to help pay the cost of monthly premiums and cost-sharing (e.g., copays) are available to some purchasers based on their annual income. The law also extended the Medicaid program to individuals not previously eligible.
However, despite its best intentions, Obamacare did not achieve everything it intended. Some states decided not to take advantage of the Medicaid expansion provisions, denying their constituents free to low-cost health care. Some individuals did not qualify for subsidies. Some people were priced out of the health insurance market due to many exchange-based plans' high health plan premiums and deductibles. And some health insurers stopped offering health plans on the exchanges or dramatically increased the costs of their plans.
And there’s more. Politicians around the country have accused the current Administration (the White House) of attempting to sabotage Obamacare’s pre-existing condition protections, essential health benefits requirement, and other popular features of the law. Also, at the direction of the Trump White House, the Department of Health & Human Services (HHS) reduced the budget and staffing previously devoted to outreach to communities that could benefit from Obamacare. The Dept. of HHS and IRS stopped enforcing the individual mandate, which required everyone to obtain health insurance unless exempted. Private health insurers filed a lawsuit against the government for reneging on its commitment to fund and pay subsidies. Several conservative attorneys general filed a lawsuit to invalidate Obamacare, and the White House elected to support the lawsuit.
Obamacare supporters in Congress drafted legislation to address affordability issues and undo all the changes to the law enacted by the Trump White House. These “updates” to Obamacare do not change the eligibility provisions of the law. One of the two “update” proposals makes a minor change to funding by extending subsidies to more people, reducing cost sharing, and requiring insurers participating in Medicare Advantage and Medicaid to offer plans on the exchanges.
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