Medicare Advantage for More: A Pragmatic Alternative to Medicare for All

In 2013, Sen. Bernie Sanders (I-Vt.) introduced a “Medicare for All” bill that would institute a government-run national health insurance system. He didn’t get a single cosponsor.

In striking contrast, when Sanders introduced his latest version of the bill in September 2017, he collected 16 cosponsors—a third of the Democratic senators—including four senators widely expected to run for president in 2020: Cory Booker (D-N.J.), Kirsten Gillibrand (D-N.Y.), Kamala Harris (D-Calif.), and Elizabeth Warren (D-Mass.).

For the past two decades, a majority of the public has felt that the federal government is responsible for ensuring healthcare coverage for all Americans. Furthermore, the percentage of Americans in favor of a single-payer healthcare system has risen from 40 percent in 1998-2000 (based on the average of six polls) to 53 percent in June 2017. ^a

However, when the Kaiser Family Foundation pointed out to its survey respondents that a single-payer system would require many Americans to pay more in taxes, 60 percent of those surveyed were opposed. In short, the public likes the concept, but it doesn’t like the price tag of such a major expansion of the federal government.

The Underbelly of Medicare for All

The cost for a single-payer system is inarguably the idea’s greatest political weakness, given the majority of the public’s aversion to increased taxes. Furthermore, with the December 2017 passage of the Tax Cuts and Jobs Act (TCJA)—which decreased the corporate tax rate from 35 percent to 21 percent and reduced tax rates for five of the seven individual tax brackets for both single filers and those married and filing jointly—implementation of Medicare for All would now require not only the repeal of the TCJA’s tax breaks for individuals and corporations, but also the imposition of additional tax increases. At least for the foreseeable future, given that the Senate requires a 60-vote majority to pass any legislation, passage of a single-payer bill appears politically infeasible.

A Good Choice: Medicare Advantage for More

In their work to “re-center” America, Wall Street Journal columnist Bill Galston on the Democratic side and conservative political analyst Bill Kristol on the Republican side have observed: “We know that our politics have gotten off kilter. As the parties have become more polarized and our politics more partisan, the great American majority—which wants to see cooperation and compromise—has been left with no good choices.” ^b

Perhaps there is a good choice in the area of health policy—one that appeals to the great American majority and practices the art of the possible, but, more important, addresses the mounting pressures on our nation to reduce healthcare costs and improve quality.

That good choice is an expansion of Medicare Advantage (MA), which, broadly speaking, is a type of Medicare health plan offered by a commercial health insurer that contracts with Medicare. Republicans have supported the MA program for years, citing its promotion of consumer choice, as well as its spurring of private-sector competition and innovation.

The MA program is increasingly popular with seniors, with more than 21 million enrollees in 2018, representing 35 percent of all Medicare beneficiaries, and it is on track to reach 50 percent by 2025. ^c Currently, there are more than 2,300 MA plans, with at least one MA plan available in 95 percent of the nation’s counties, covering 99 percent of the Medicare population. ^d

To promote and reward quality performance, MA plans are subject to a star rating system. Evidently, consumers understand the system, as they have generally steered their enrollments toward the MA plans with the most stars, and the MA program overall boasts one of the highest customer satisfaction ratings among health insurance plans. While explicitly focused on quality, the star rating system assumes that over the long haul, higher-quality care will ultimately result in less-costly care.

Greater Flexibility for Medicare Advantage

As a clear indication of the Trump administration’s support of the MA program, in April, the Centers for Medicare & Medicaid Services (CMS) published a Final Rule and Call Letter that approved several new programs available to MA plan sponsors. CMS expanded the definition of primarily health-related supplemental benefits, which opens the opportunity for MA plans to offer additional services that “increase health and improve quality of life.” These changes will allow MA plans to expand existing coverage to address social determinants of health, enabling them to more effectively pursue value-based care and population health strategies. ^e

Opportunities for Expansion

The MA program could be leveraged in the following ways to reach other segments of the population:

• As a replacement for state Medicaid programs—perhaps decided on a state-by-state basis—to ameliorate Medicaid’s out-of-control costs and low provider participation
• As a health plan alternative on the Affordable Care Act’s health insurance marketplaces to improve consumer choice, because currently about 26 percent of enrollees (living in 52 percent of the nation’s counties) have access to just one insurer on the marketplacef
• As a lower-cost alternative for employers, in which they would pay for MA via a capped payroll tax that would be less than the average percentage of payroll they currently pay for commercial insurance

Conclusion

Although the extremes of the political left and right—touting Medicare for All on one end and the complete repeal of the Affordable Care Act on the other—will undoubtedly continue to captivate both Capitol Hill and the media during the next few years, Medicare Advantage for More constitutes a more proven, politically feasible middle-ground approach that the majority of Americans would likely support.

Footnotes

a. Scott, D., “Americans Don’t Yet Know Whether They Really Support Single-Payer,” Vox,  Sept. 13, 2017.
b. Galston, B., and Kristol, B., “Ideas to Re-Center America,” The New Center, Sept. 2017.
c. Gorman, J., “2018 Medicare Advantage Enrollment Report by the Numbers,” Gorman Health Group Blog, March 7, 2018.
d. Jacobson, G., Damico, A., and Neuman, T., “Medicare Advantage 2018 Data Spotlight: First Look,” Kaiser Family Foundation, Oct. 13, 2017.
e. URAC staff, “Medicare Advantage Expansion Shakes Up Healthcare Market,” URAC, May 17, 2018.
f. Semanskee, A., Cox, C., Claxton, G., et al., “Insurer Participation on ACA Marketplaces, 2014-2018,” Kaiser Family Foundation, Nov. 10, 2017.