President-elect Joe Biden won election with a mandate to continue the healthcare reforms begun by President Barack Obama. On the campaign trail, Biden pledged to protect and build on the Affordable Care Act.
Many people have urged Biden to make good on his promise by implementing “Medicare for All.” That would be a mistake. There’s a better system out there—and for more than two decades, it has successfully relied on public-private partnerships to expand access to care, lower costs and improve outcomes for millions of Americans. What the country needs is “Medicare Advantage for All.”
Under traditional Medicare, the government pays doctors and hospitals for individual services, tests and procedures. Under Medicare Advantage, the government sends capitated payments to private insurers—including not-for-profits—which, in turn, are charged with providing highly coordinated, whole-patient care to beneficiaries.
Introduced in their current form in 1997, Advantage plans have proven wildly popular among the mostly older adult populations they cover. That’s in large part because the plans are able to offer a wider array of health-related benefits than traditional Medicare. They commonly charge no premiums, cover prescription drugs, and include no- and low-cost vision and dental benefits. Many offer gym memberships, acupuncture and chiropractic coverage, as well as transportation options to get patients to their appointments.
As popular as these plans are with consumers, that’s not the primary reason to expand their availability. The fact is, Advantage plans outperform traditional Medicare, producing better outcomes at lower costs for both the government and beneficiaries alike. A recent study, for example, looked at people with chronic conditions and found that Advantage plans performed better on several key quality measures, including avoidable hospitalizations and higher rates of preventive screenings.
Likewise, a separate study found that annual beneficiary costs for Advantage enrollees are about 40% lower than for those in traditional Medicare. And because, by law, Advantage plans come with maximum out-of-pocket limits, beneficiaries are protected from the costs that cause traditional Medicare beneficiaries to purchase private “Medigap” plans to supplement their coverage.
As for the government’s portion of the bill, it’s impossible to know exactly how much any “public option” might cost taxpayers without knowing the details of each proposal (Will there be premiums? How much are co-payments? What types of benefits will be included?). Nevertheless, past practice demonstrates that it costs less to care for Advantage enrollees. Humana, for example, just reported that the cost to care for members in its Advantage plans was 19% less than for traditional Medicare enrollees.
At the same time, it’s essential to note that much of this savings derives from the value-based payment contracts baked into most Advantage plans. And that could present a challenge, because Americans often say they want to see any doctor in any network of their choosing. That vision is incompatible with most Advantage plans, which derive their savings—as well as the cohesion of care they provide—from managed-care networks which, by definition, limit one’s choice of providers.
On the other hand, knowing that the coordinated care these networks provide produces better health outcomes and that the private insurers that administer Advantage plans have proven track records collaborating with public officials to design affordable plans that deliver consumer choice and excellent outcomes would surely appeal to a broad swath of the populace. What’s more, growing Medicare Advantage would not require a massive expansion of the federal government’s role in healthcare, something the majority of Americans consistently say they oppose.
President-elect Biden has said that he wants to offer Americans the ability to buy into “a public health insurance option like Medicare.” The best such option is Medicare Advantage. It’s widely relied upon by our parents and grandparents. And in these times of economic uncertainty, it’s time to make it available to everyone.
