Going All In Medicare for All and other - American Medical Group Association

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Going All In Medicare for All and other - American Medical Group Association
IN WASHINGTON [                        legislation + regulations + advocacy
                                                                                    ]
                                                                                                    Senator Bernie Sanders
                                                                                                   (I-VT) has outlined a plan
                                                                                                      to finance a Medicare-
                                                                                                           for-All single payer
                                                                                                       healthcare system as
                                                                                                     part of his campaign for
                                                                                                               the presidency.

Going All In                                               Medicare for All and other
                                                           Medicare extender legislation

                  M
By Lauren N.                   edicare for All has been in the news       between 50 and 64, as well as offer up Medi-
Lattany, M.P.S.                frequently for the past several            care as an “option” that people or employers
                               months. Bernie Sanders (I-VT),             could buy into.
                               Kamala Harris (D-CA), Cory Booker             While these legislative efforts would provide
                  (D-NJ), Elizabeth Warren (D-MA), and Kristen            coverage to those who are uninsured and under-
                  Gillibrand (D-NY) support both the concept of           insured, they would also reimburse providers
                  Medicare for All, as well as specific legislation       at Medicare rates for whatever population of
                  creating it. Importantly, every one of these            patients eventually enrolls in the program. And
                  current U.S. Senators is running to be the              while passing Medicare-for-All legislation is not
                  next President of the United States. Almost             likely in the short to medium term, Medicare
                  as importantly, Medicare for All has become             for 50+ and Medicare as a Public Option legis-
                  a litmus test for millions of progressives who          lative efforts are increasingly being viewed as
                  have said they will not support any Democratic          reasonable alternatives to the more disruptive
                  candidate who does not support it. It should be         Medicare-for-All concept. All of these Medicare
                  noted, though, that while Medicare for All gets         legislative options will continue to be front and
                  most of the airtime, there are other efforts that       center as the country moves toward the presi-
                  would “extend” the Medicare program to people           dential election in 2020.

06    AMGA.ORG
      JUNE 2019
Going All In Medicare for All and other - American Medical Group Association
Recent Congressional Action                          than limited cost sharing (up to $200 per year)
Medicare for All                                     on prescription drugs to encourage the use          A recent tracking
On April 30, the House of Representatives Com-       of generics.3 HHS would distribute providers’       poll by the
mittee on Rules held a hearing on the Medicare       reimbursements through regional offices. Each       Kaiser Family
for All Act of 2019.1 The committee’s decision       regional office would receive a global budget
                                                                                                         Foundation found
to hold a hearing on the legislation marked a        that covers payments to providers, capital
                                                                                                         that a majority
turning point for progressive members of Con-        expenditures, special projects, health profes-
gress and advocates in the national single-payer     sional education, administrative expenses, along
                                                                                                         of Americans
healthcare system debate. The progression also       with prevention and public health activities. HHS   believe that
reflects the American public’s shifting views on     would determine Medicare reimbursement rates        the federal
the government’s role in increasing access to        on a yearly basis.                                  government
health insurance. A recent tracking poll by the         While the goal of the Medicare-for-All pro-      should do more
Kaiser Family Foundation found that a majority       posal is gaining traction for certain members       to help provide
of Americans believe that the federal govern-        of Congress and the American public, several        health insurance
ment should do more to help provide health           questions remain regarding the overall cost of      for Americans
insurance for Americans by expanding already         implementing the proposed system. An analysis       by expanding
existing public programs, including a Medicare       by Charles Blahous of the Mercatus Center           already existing
buy-in for adults between the ages of 50 and         determined that a Medicare-for-All program
                                                                                                         public programs,
64.2 More surprisingly, 56% of the Americans         would add approximately $32.6 trillion to the
                                                                                                         including a
polled supported the idea of a national              federal budget over 10 years due to increased
Medicare-for-All plan, although support for the      healthcare utilization and demand.4 Moreover,
                                                                                                         Medicare buy-in
plan decreased when asked about payment              the report conservatively estimated that provider   for adults
methods and potential patient wait times. The        reimbursements would be reduced by $4.9 tril-       between the
poll, which has tracked public opinion on these      lion over the same 10-year time period. However,    ages of 50 and 64.
issues since 1998, will likely influence health      the report notes that total healthcare expendi-
policy proposals for all members of Congress         tures could be reduced by up to $2 trillion over
and the 2020 presidential campaign.                  the same timeframe due to prescription drug
  The Medicare for All Act of 2019, introduced       costs savings and lower administrative costs.5
by Rep. Pramila Jayapal (D-WA) and Sen. Bernie          Another analysis, by the Goodman Institute
Sanders, would merge all existing health             for Public Policy Research, noted that expansion
insurance programs (public and private) into         of the Medicare-for-All system might be a step
an expanded national Medicare program for            backward in care innovation in comparison to
all U.S. residents. While most legacy govern-        the Medicare Advantage program, which has
ment programs would sunset, the Veterans             been shown to reduce costs while improving
Administration and Indian Health Services            health quality.6 Members of Congress and stake-
would remain intact. The legislation also would      holders also have raised concerns regarding how
end value-based care by sun-setting existing         Medicare for All would affect the Medicare Trust
value-based programs (such as those created          Fund. A recent report by the Medicare Trustee
under the Medicare Access and CHIP Reau-             Fund projects that the Medicare Part A hospital
thorization Act), Medicare Advantage, and            and inpatient benefits will be depleted in 2026.
Alternative Payment Models (such as Account-         The Trustee Fund’s report calls into question the
able Care Organizations). Medical groups would       future of the current Medicare program and sug-
have the ability to contract with the Department     gests a rapid expansion would cause Medicare
of Health and Human Services (HHS) to provide        to become financially unsustainable.7
patient services on a case-by-case basis.
  The Medicare for All Act of 2019 would cover all   Medicare-X Choice
medically necessary services, including primary      On April 2, Sens. Michael Bennet (D-CO) and
care, hospital and outpatient services, long-        Tim Kaine (D-VA) introduced the Medicare-X
term care support, as well as vision, dental, and    Choice Act of 2019,8 which would create a
audiology services. There would be no premium        Medicare public health insurance plan on the
or cost-sharing requirements for patients, other     Affordable Care Act Exchange and has been

                                                                                                              AMGA.ORG
                                                                                                             JUNE 2019   07
IN WASHINGTON
Table 1

Financial Effects of Medicare for All Act, in Billions of Dollars
                                                          2022          2023          2024    2025      2026       2027      2028       2029       2030

            Currently projected personal
                                                         3,859          4,077         4,309   4,546     4,824      5,120     5,433      5,766     6,120
                    healthcare spending

          + Added induced demand from
                                                          +435          +459          +485    +511      +542       +574      +609       +645      +684
                    increased coverage

   – Applying Medicare payment rates                      –384          –411          −441    –473      –505       –540      –577       –616      –658

                           – Drug cost savings             –61           –66           –70    –75        –80       –86        –92        –98       –105

     = Healthcare spending under M4A                     3,849          4,060         4,283   4,509     4,780     5,068      5,373      5,697     6,041

             Currently projected national
                                                         4,562          4,819         5,091   5,370     5,696     6,042      6,410      6,799     7,213
              health expenditures (NHE)

       – Change in healthcare spending                     –10           –18           –26    –36        –44       –52        –60        –69       –79

                         – Admin. cost savings             –83           –88          –142    –149      –158       –168      –179       –190       –201

                             = NHE under M4A             4,469          4,713         4,923   5,184     5,494     5,823      6,171      6,541     6,933
Source: “The Costs of a National Single-Payer Healthcare System,” Mercatus Working Paper

                                    endorsed by former Vice President and pres-                       Medicare Buy-In
                                    idential candidate Joe Biden. The legislation                     Other Medicare expansion bills currently being
                                    would include coverage not currently covered                      discussed in Congress are the Medicare Buy-In
                                    by the Medicare program, such as for pediat-                      and Health Care Stabilization Act of 2019,11
                                    rics and maternity care. The legislation would                    introduced by Reps. Brian Higgins (D-NY), John B.
                                    reimburse hospitals, physicians, and other par-                   Larson (D-CT), and Joe Courtney (D-CT), and the
                                    ticipating providers using enhanced Medicare                      Medicare at 50 Act,11 introduced by Sen. Debbie
                                    payment rates. However, the legislation would                     Stabenow (D-MI). These pieces of legislation would
                                    allow for the continuation of employer-based                      allow Americans ages 50–64 the option to buy into
                                    plans, so Americans could either continue their                   the current Medicare program while maintaining
                                    public option coverage or continue coverage                       the current private insurance market and other
                                    under their employer’s health insurance plan.                     existing public health insurance programs. They
                                    The legislation also would allow the government                   would also permit employers of Americans ages
                                    to negotiate prescription drug prices.9                           50–64 receiving employer-sponsored coverage to
                                      There is currently no Congressional Budget                      use their employer contributions to buy into the
                                    Office (CBO) score regarding the overall cost                     Medicare program.
                                    of this legislation. However, a recent report by                     Plan participants eligible for the Medicare Buy-In
                                    KNG Health found that the adoption of a Medi-                     program would pay the existing Medicare monthly
                                    care public option plan would lead to a cut of                    premium and would be eligible for Affordable Care
                                    nearly $800 billion for hospital-based services                   Act-based premium and cost-sharing subsidies.
                                    over a 10-year period from 2024 to 2033, while                    The bill would also enhance cost-sharing subsidies
                                    utilization (and, therefore, costs) would grow as                 available through all Silver plans in the marketplace
                                    a result of increased coverage.10 The analysis                    and would extend these subsidies to individuals
                                    estimated that 50 million individuals would leave                 with incomes up to 400% of the federal poverty
                                    their employer-sponsored plans (ESPs) to buy into                 level (FPL). When buy-in enrollees become eligible
                                    the Medicare public option plan. The report also                  for the current Medicare program at age 65, pre-
                                    noted that because of this shift from ESPs to the                 mium and cost-sharing subsidies, as well as other
                                    public option, provider reimbursements could be                   coverage features, would revert to those applicable
                                    reduced by $1.2 trillion over 10 years.                           to Medicare beneficiaries under current law.12

08           AMGA.ORG
             JUNE 2019
The Buy-In legislation would require all Medicare-               8. S.981 - Medicare-X Choice Act of 2019. 2019. Accessed May 1,
participating providers and facilities to participate in the           2019 at congress.gov/bill/116th-congress/senate-bill/981.
Medicare Buy-In and would reimburse hospitals, physi-              9. American Hospital Association. 2019. The Impact of Medicare-X
                                                                       Choice on Coverage, Healthcare Use, and Hospitals. Accessed
cians, and other participating providers using Medicare
                                                                       May 1, 2019 at aha.org/position-paper/2019-03-11-impact-
payment rates. There is currently no CBO estimate                      medicare-x-choice-coverage-healthcare-use-and-hospitals.
regarding the cost of the legislation or discussion on how         10. J. Hacker. 2018. The Road to Medicare for Everyone. The American
the legislation would be funded. However, an analysis                  Prospect, January 3, 2018. Accessed May 1, 2019 at prospect.org/
by Avalere Health found that nearly 13 million Ameri-                  article/road-Medicare-everyone.
                                                                   11. H.R.1346 - Medicare Buy-In and Health Care Stabilization
cans age 50 or over who are currently uninsured or have
                                                                       Act of 2019. 2019. Accessed May 1, 2019 at congress.gov/
individual coverage purchased through the private market               bill/116th-congress/house-bill/1346.
inside and outside the exchange could be eligible to buy           12. Neuman, Tricia, et al. “Medicare-for-All and Public Plan Buy-In
into the Medicare program.13                                           Proposals: Overview and Key Issues.” The Henry J. Kaiser Family
                                                                       Foundation, 9 Jan. 2019, www.kff.org/medicare/issue-brief/
                                                                       medicare-for-all-and-public-plan-buy-in-proposals-overview-
Going Forward                                                          and-key-issues.
Clearly, any legislation extending Medicare coverage and           13. C. Pearson, E. Carpenter, and C. Sloan. 2016. 13 Million
Medicare payments rates to millions of people would                    Adults Could Be Eligible to Purchase Medicare Coverage
have a dramatic impact on medical groups. AMGA will                    under Proposed Clinton Plan. Avalere Health, Press Release,
continue to monitor these legislative efforts in Washing-              May 19, 2016. Accessed May 1, 2019 at avalere.com/
                                                                       press-releases/13-million-adults-could-be-eligible-to-purchase-
ton, and we welcome your comments on what impact this
                                                                       medicare-coverage-under-proposed-clinton-plan.
legislation could have on your organizations.

Lauren N. Lattany, M.P.S., is director, government relations, at
AMGA.

References
1. S.1084, Medicare for All Act of 2019. 2019. Accessed May 1,
   2019 at congress.gov/bill/115th-congress/senate-bill/1804/
   text.
                                                                          Now Available!
2. The Henry J. Kaiser Family Foundation. 2019. Public
   Opinion on Single-Payer, National Health Plans, and
   Expanding Access to Medicare Coverage. Published: April
   24, 2019. Accessed May 1, 2019 at kff.org/slideshow/
   public-opinion-on-single-payer-national-health-plans-and-
   expanding-access-to-medicare-coverage.
3. B. Sanders. 2019. Options to Finance Medicare for All.
   Accessed May 1, 2019 at sanders.senate.gov/download/
   options-to-finance-medicare-for-all?inline=file.
4. C. Blahous. 2018. The Costs of a National Single-Payer
   Healthcare System. Mercatus Center, George Mason
   University. Accessed May 1, 2019 at mercatus.org/
                                                                                   2018 Medical Group
   system/files/blahous-costs-medicare-mercatus-working-
                                                                                   Compensation and
   paper-v1_1.pdf.                                                                 Productivity Survey
5. Ibid.
6. J. Goodman. 2018. What You Need To Know
   About Medicare For All, Part I. Goodman Institute
   for Public Policy Research, September 7, 2018.
   Accessed May 1, 2019 at goodmaninstitute.org/
   what-you-need-to-know-about-medicare-for-all-part-i.
7. Centers for Medicare & Medicaid Services. 2019. 2019
   Annual Report of the Boards of Trustees of the Federal
   Hospital Insurance and Federal Supplementary Medical                          Also: Updated Interactive
   Insurance Trust Funds.” Accessed May 1, 2019 at cms.gov/
   Research-Statistics-Data-and-Systems/Statistics-Trends-                       Online Compensation Database
   and-Reports/ReportsTrustFunds/Downloads/TR2019.pdf.
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