The Center for American Progress (CAP), a liberal-leaning think tank, has added a proposal to the debate on how to achieve universal health coverage but without moving the U.S. to a single-payer healthcare system—though providers would be paid less than they currently are by private insurance and hospitals would need to adapt to a big expansion of bundled payments.
The plan, called “Medicare Extra for All,” would aim to expand the gains in insurance coverage since the Affordable Care Act (ACA), eliminating “underinsurance” while banking on the savings of lower administrative costs modeled after Medicare rather than private plans.
“The Affordable Care Act was a historic accomplishment and a giant step toward universal health coverage,” said CAP’s president and CEO Neera Tanden. “The sustained political fight over the law shows that Americans want to expand coverage, not repeal it. Medicare Extra would take the next step by guaranteeing the right of all Americans to enroll in the same high-quality health care plan. It is time to guarantee universal coverage and health security for all Americans.”
Here are five major provisions of the proposal and how it would change health coverage in the U.S.:
1. Benefits, eligibility and premiums
Everyone in the U.S. would be eligible for Medicare Extra, including those already covered by Medicare and Medicare Advantage. Enrollment would be automatic for individuals turning 65 as well as newborns and the uninsured.
The benefits would go beyond the ACA’s required health benefits, offering treatment for chronic disease, generic drugs and preventive care for free while adding dental, vision and hearing services to the list of guaranteed benefits.
Premiums would “reflect the cost of coverage only,” being varied on a person’s income. For example, for families with incomes between 150 percent and 500 percent of the federal poverty level, premiums would be capped between 0 and 10 percent of income. Actuarial value would also vary based on income, though going no lower than 80 percent—10 percentage points higher than the ACA’s most popular silver-level plans.
2. What happens to employer-sponsored insurance
The greatest difference between Medicare Extra and the single-payer, “Medicare for All” plan advocated by Sen. Bernie Sanders, I-Vermont, in 2017 is the impact on existing employer-sponsored plans. Rather than ending them entirely, as the Sanders legislation would, employers would have four options under Medicare Extra:
- Continue sponsoring coverage with a minimum actuarial value of 80 percent and contributing at least 70 percent of premiums.
- Make Medicare Extra the plan for their employees, paying at least 70 percent of its premium.
- Make maintenance-of-effort payments while employees enroll in Medicare Extra.
- Make aggregated payments instead of contributing to premiums, ranging from 0 percent to 8 percent of their payroll depending on the size of the company.
For employers with fewer than 100 full-time-equivalent employees, they would need to make any payments. They wouldn’t be required to offer coverage, but could keep ACA-compliant plans if those had been offered or enroll workers in Medicare Extra.
Employees would have their own choice to make, as they would be allowed to enroll in Medicare Extra even when their employer continues sponsoring a plan.
3. What providers would be paid
Payments to providers would be lower than what commercial insurance typically offers, CAP said, being based on an average of commercial, Medicare and Medicaid reimbursement—minus a certain percentage, which could make the Medicare Extra rate higher than what’s currently offered by CMS.
“For rural hospitals, these rates would be increased as necessary to ensure that they do not result in negative margins,” the CAP plan said. “For physicians, average rates for primary care would be increased by 20 percent relative to certain rates for specialty care on a budget neutral basis. This adjustment would correct Medicare’s substantial bias in favor of specialty care at the expense of primary care.”
For employer-sponsored plans, out-of-network providers wouldn’t be able to charge more than the Medicare Extra rate.
Bundled payments for hospitals for 90-day episodes of care would also be a part of the plan. While CAP didn’t specify what procedures would be included, it would seem to encompass far more than current voluntary CMS models. The plan would expand bundled payments over three years “until it applies to half of spending on hospital admissions.”
Site-neutral payment would also be included, as CAP said the current Medicare structure has led to a wave of hospital acquisitions of physician offices.
4. Medicare Advantage becomes Medicare Choice
Medicare Choice would be an option to Medicare Extra enrollees, offering the same benefits with the possibility of adding more for an additional premium. To fight what it sees as “overpayment” to current Medicare Advantage insurers, CAP said the plan’s bidding process would capped.
“Payments could be no more than 95 percent of the Medicare Extra premium,” CAP said. “This competitive bidding structure would guarantee that plans are offering value that is comparable with Medicare Extra. If consumers choose a plan that costs less than the average bid, they would receive a rebate. If consumers choose a plan that costs more than the average bid, they would pay the difference.”
5. There’s no cost estimate
While the CAP plan mentioned several ways to pay for at least part of this overhaul—everything from banking on savings from administrative efficiencies to reversing parts of the corporate tax cuts passed in 2017 to placing a penny per ounce tax on sugary drinks—the plan doesn’t come with an estimate on how it would cost.
The price tag is where other Democrat-led healthcare plans have drawn the fiercest opposition, such as the $400 billion estimated annual cost for California’s single-payer proposal.