Senators Tim Kaine of Virginia and Michael Bennet of Colorado released an updated draft of their “Medicare X” legislation. The Congressional Quarterly is reporting that the bill would “offer a public option insurance plan run through Medicare and offered on the exchanges set up under the 2010 law beginning in 2021. The plan would launch in regions with one or no commercial insurance plans offered on the exchange, expanding to all areas of the country and the exchange for small businesses by 2025, according to a summary. The plan also seeks to use savings from the public option to increase affordability for all exchange enrollees, including by setting a cap of 13 percent of one’s income on premiums for exchange plans. The plan would be run based on the Medicare fee schedule and would cover the essential health benefits required for other exchange plans. The Health and Human Services secretary could opt to reimburse hospitals and providers in rural areas up to 125 percent of Medicare rates. Consumers eligible for tax credits and cost-sharing under the health care law could apply that financial assistance to the public plan. Premiums for the public plan would be set to cover the full actuarial cost of the plan, including administrative costs. The Centers for Medicare and Medicaid Services, which would administer the plan, would be responsible for setting premiums, as well as deductibles and cost-sharing.”
Takeaway
Provided Republicans hold a chamber of Congress and/or the White House, any version of “Medicare for All’ is a non-starter. While the prospects for some version of Medicare for All improve if the Dems sweep Congressional elections and take the White House in 2020, it’s marginal improvement at best absent some macroeconomic shock. While the 2020 senatorial map favors the Dems in numbers of seats up this cycle, it’s hard to see any plausible scenario where they win a 60 vote super-majority. With far less than 60 votes (51 or 52 Senate seats, best case scenario, according to “Sabato’s Crystal Ball”), they could still pass this or similar legislation under reconciliation. However, according to the Washington Post, moderate Dem’s unease with Medicare for All coupled with relatively recent memories of the losses sustained after the passage of the Affordable Care Act still make passage unlikely due to electoral fall out. Longer term, as cost growth continues to price middle class families out of coverage and access to care, support for some version of Medicare for All will grow and likely reach a political tipping point where it becomes orthodoxy in the next 10 years. It’s certainly already come a lot further as a political concept than I would have anticipated in the last three or four years. When it hits that tipping point, legislation like the Kaine/Bennet bill will be the entry point of Medicare expansion to the general population. Even if it starts as a buy-in option, it will likely compress rates as health plans are either forced to reduce payments to providers or lose market share to the public option plan.
