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.

Medicare-X 2.0 deserves a second look

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As originally introduced by Senators Bennet and Kaine in October 2017, the Medicare-X Choice Act (summary here) placed a big fish --  a strong public option -- in a small pond, the ACA marketplace.

The "Medicare-X" public option would first be introduced into low-competition areas in the ACA marketplace, and then into all rating areas. The public plan would pay Medicare rates to providers, and providers who accept Medicare would be required to accept it. But in the first iteration, eligibility for subsidies adhered to ACA criteria, and the subsidies themselves were not improved. While it might improve affordability for the unsubsidized, its appeal to subsidized enrollees might be more limited, though the full Medicare provider network might be a powerful draw. As to premium, however,  I noted recently

By conforming to current ACA subsidy structure, Medicare-X runs afoul of the ACA paradox: measures that reduce unsubsidized premiums do not improve affordability for the two thirds of current individual market enrollees who receive subsidies. In fact, premium reductions often reduce discounts by compressing price spread between benchmark plans, against which subsidies are set, and cheaper plans, to which the subsidy can be applied.

The bill did phase in a small business buy-in, and that might be attractive, as the unsubsidized price might be a relative bargain for small businesses, and the provider network would be unbeatable. It might thus expand the small group market,  which enrolled an estimated 13.6 million people in 2016.

The update introduced this month (bill here, summary here) widens the pool of potential beneficiaries, combining measures that expand subsidy eligibility and reduce unsubsidized premiums -- potentially offsetting the cost of subsidizing more enrollees. It's a limited and cost-conscious expansion of benefits that might make the ACA work more as designed.

Hospital industry will brook no Medicare expansions

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The American Hospital Association has commissioned a study by KNG Health Consulting that fires a warning shot against any expansion of public coverage that draws people out of the private market.

The report purports to show that the Medicare-X Choice Act introduced in 2017 by Senators Bennet and Kaine, establishing a strong national public option in the ACA marketplace, would cut healthcare spending by $1.2 trillion over ten years. Hospital spending would account for $774 billion of the total.  The study also forecasts that 5.5 million uninsured people would gain coverage.

As U.S. per capita healthcare spending is more than double the OECD average, one might think that cutting costs while increasing coverage would be cause for celebration. Of course the AHA doesn't see it that way, and warns of dire results for hospitals resulting from some 35 million people* shifting from private to a public plan that pays Medicare rates for services.  Leaving aside assumptions about hospitals' adaptability, and the study's calculations with respect to hospital revenue, its assumptions about the impact of Medicare-X on enrollment in private insurance strike me as dubious.