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November 30, 2019 01:00 AM

What’s the matter with Medicare for More?

Merrill Goozner
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    Merrill Goozner

    Merrill Goozner, Editor Emeritus

    The hospital industry is voicing collective opposition to every proposal being put forward by Democrats in the run-up to next year’s elections. They’re not just against Medicare for All, which is being championed by half the candidates in the race. They’re also opposing moderate candidates’ call for adding a public option—what some call Medicare for More—to the Affordable Care Act exchanges.
     
    That leaves the American Hospital Association, the Federation of American Hospitals, Ascension and the other providers in the Partnership for America’s Health Care Future without a political champion. The partnership, a coalition of insurers, drug companies and providers, was formed in mid-2018 to oppose Medicare for All and the public option.

    Their preferred solution for reaching universal coverage is fixing Obamacare. While that’s not enough for Democrats, it’s anathema to Republicans and the president, who broke it in the first place.

    Since Donald Trump took office, his administration has withheld cost-sharing subsidies; ended the individual mandate; backed the law’s repeal in court; slashed outreach funding; temporarily  suspended risk-adjustment payments; promoted skimpy health plans; undercut the small-group insurance market; discouraged Medicaid enrollment by adding work requirements; and weakened rules against discrimination of all types.

    The fruits of the GOP’s labors are plain to see. The nation’s uninsured rate is climbing again despite the lowest unemployment rate in half a century. That’s not a very good advertisement for an employer-based health insurance system.

    Republican sabotage of the ACA has also had the pernicious effect of undermining the private insurance market. Those rates are rising faster than economic growth in part because uncompensated care is again on the upswing and getting piled onto the extra costs employers already shoulder to make up for shortfalls in government reimbursement.

    To cope, employers are shifting more costs to families with higher co-pays and deductibles. The result is an affordability crisis and growing public outrage over the high provider prices they’re now exposed to, often through out-of-network charges.

    The public is increasingly open to bold solutions. Fully 88% of Democrats and Democratic-leaning independents support a public option, higher than the 77% who support Medicare for All. What’s most surprising is that 41% of Republicans and Republican-leaning independents also back Medicare for More, the latest Kaiser Family Foundation poll found.

    Moreover, Medicare for More brings none of Medicare for All’s political baggage. No one will be forced to forgo employer-based coverage. Few large employers will shift workers onto the public plan as long as stiff penalties for failing to provide insurance are put in place. Medicare for More is also pro-competition. It would provide an alternative in the vast swaths of the nation, mainly rural, where only one or two insurers offer plans.

    It wouldn’t require massive tax increases, either. The Urban Institute analysis of various reform options pegged the cost of universal coverage through a public option at less than 5% of Medicare for All. Reversing three-fourths of the $2.3 trillion Trump tax cut would easily pay for its 10-year, $1.5 trillion price tag. Of course, the Urban Institute assumed the public plan would pay Medicare rates. This is providers’ main complaint. In a joint report released last March, the two hospital associations estimated a public plan paying Medicare rates would lower provider revenue by $774 billion over the next decade.

    To assuage those concerns, the Medicare for More plan could raise its rates. Washington, the only state to adopt such a plan, set its hospital and physician pay schedules at 160% of Medicare rates. A different Congress could repeal all of the Trump tax cuts to pay for it. Big deal.

    A few weeks back, I called Medicare for All a political loser, saying we need pragmatic approaches for solving the nation’s ongoing coverage and affordability woes. Fixing Obamacare with a public option is such an approach.

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