Friday, May 31, 2019

Michael Bennet misrepresented his Medicare-X bill on CNN

Colorado Senator Michael Bennet, who entered the presidential race on May 2, made headlines yesterday for taking on Bernie Sanders' Medicare for All plan in a CNN Town Hall yesterday. Bennet claimed that it's impracticable to take employer-sponsored insurance away from "180 million people" currently insured through their employers ( a high estimate), especially from millions whose unions have negotiated good benefits.

It's a familiar line of attack. More noteworthy was the fact that Bennet misrepresented his own ACA reform bill, the Medicare-X Choice Act, which introduces a national public option into the ACA exchanges. Here's what Bennet said (my transcript and emphasis):
What we would be much better off doing to get to universal healthcare quickly is to finish the job we started with the Affordable Care Act and have a true public option...The one that I have designed would be administered by Medicare and it would give all of you the chance to choose what's right for you and your family. If you want a public option then you can have it. Basically it's Medicare for all if you want it. But if you to keep the insurance you have, which many people do, you'd be able to do that as well.
This is not literally untrue. As of the fifth year after enactment, anyone could buy into Medicare-X, which would be offered in all counties nationwide alongside private plans in the ACA marketplace. But only a limited number of people could buy in on a subsidized basis. Most people whose employers offer insurance would not be subsidy-eligible.

While Medicare-X expands ACA subsidy eligibility in one vital way, it conforms to the basic ACA eligibility structure: those whose employers (or household member's employers) offer insurance deemed "affordable" by ACA  standards are not eligible. And the affordability standard is very high: if the employer offer individual coverage providing "minimum essential benefits" for a premium that's under about 10%* of the employee's income, that employee and family is ineligible for ACA subsidies.

Unlike "ACA 2.0" bills introduced in the House and Senate, Medicare-X does not even fix the so-called "family glitch," whereby if the employer's individual coverage is "affordable" for the employee, but family coverage isn't, the whole family is ineligible for ACA subsidies. The bill does expand subsidy eligibility to all income groups, capping premiums for a benchmark silver plan as a percentage of income that tops out at 13% for those with incomes above 600% of the Federal Poverty Level, which is $72,840 for an individual or $150,600 for a family of four this year. But those subsidies are not available to anyone with an "affordable" offer of insurance from an employer.

It's true that those with access to employer-sponsored insurance can buy into the exchange on an unsubsidized basis. But that would not be a realistic choice for all but a tiny minority of those whose employers offer health insurance. The average unsubsidized single-person premium for a benchmark silver plan on the ACA exchange is $477 this year -- albeit varying hugely by region and income ( a solo young adult in Boston, Massachusetts might pay $273 for benchmark silver). The ACA benchmark plan has an actuarial value of 70%, meaning it's designed to cover 70% of the average enrollee's yearly medical costs. Actuarial value for employer sponsored plans averages over 80%.  The ACA silver plan deductible averages over $4000 for an individual. The average deductible in employer plans is $1,573, according to the Kaiser Family Foundation. A public option in the ACA exchange would probably offer better value than most private plans, but not all.

Bennet's Medicare-X is a good strong bill, with limitations. It introduces a strong public option nationally (albeit slowly), paying Medicare rates to providers (potentially compromised by alternative payment models available to HHS) and requiring providers who accept Medicare to accept it.Crucially, it removes the ACA income cap on subsidy eligibility, making individual market coverage at least marginally affordable to anyone who lacks access to employer-sponsored insurance (though it really should fix the family glitch). It also makes coverage slightly more affordable at lower income levels, shaving a half point off the percentage of income required to buy a benchmark silver plan.

What it doesn't do is make "Medicare" affordably available to anyone who opts into it. For that, see  the Medicare for America Act.

* The affordability threshold fluctuates slightly from year to year between 9.5% and 10% of income. 

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