Friday, September 23, 2016

Medicare buy-in, Republican style

At healthinsurance.org, I explore a possible future political deal to amend the ACA, with help from Jack Hoadley of Georgetown and Harold Pollack of the University of Chicago:
One might assume that Republicans would never go for a Medicare buy-in, as it would expand the ranks of those who get "government-run" insurance.  But what if the buy-in were limited to Medicare Advantage plans, the GOP's beloved Medicare stepchild?

Republicans might view a buy-in limited to Medicare Advantage as a gateway drug. At present, only 2% of Medicare Advantage enrollees switch to traditional Medicare, so those who came in via a buy-in would probably stay in. Increasing MA's already-growing market share from the current 30% toward or beyond parity with traditional Medicare might be tempting to GOP lawmakers.

On the merits, the case for limiting a buy-in to Medicare Advantage plans is that unlike traditional Medicare, they are structured to meet ACA coverage requirements in one package.  That is, Medicare Advantage plans cap enrollees' yearly out-of-pocket medical costs and usually include a drug plan. To meet ACA coverage requirements, a buy-in to traditional fee-for-service Medicare would require either separate purchase of a drug plan and Medigap plan or a redesign of the "traditional" package, which at present covers 80% of hospital and doctor fees but does not cap enrollees' yearly costs.
There are two subtexts here: 1) The ACA marketplace needs the kind of Congressional TLC showered on the Medicare Advantage in 2003, and 2) why isn't the ACA marketplace structured more like Medicare Advantage, with the government paying private insurers on a capitation basis that enables/compels them to pay more or less Medicare rates to healthcare providers? 

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