Medicare C for All might be the answer – The Seattle Times

Personal Finance

I was hoping the Republicans would cure our ailing health-care system. But Trumpcare, as the nonpartisan Congressional Budget Office made clear, was more concerned with tax cuts for the rich than coverage for the poor. It fully deserved its fate.

Yet without full, universal coverage at an affordable price, we all face major financial risk — for ourselves or for those whose bills we’ll have to help pay. Leaving Obamacare to “explode,” as the president puts it, is no answer. Some 30 million of us already have zero coverage. Tens of millions more face that prospect if major insurance companies continue to abandon Obamacare, a process this administration hopes to drive.

None of us can sit back and watch this train wreck. We all need to get into the weeds, decide precisely what health-insurance system our country needs, and lobby Congress accordingly.

Clearly, some of us simply don’t care that others are uninsured. One reader emailed, “I have insurance. You want me to pay for some loser’s health care?”

To quote Bob Dylan, “The wheel’s still in spin.” That reader, his kids, his nephew, could lose their jobs and health insurance tomorrow. He’d then be singing, “This land was my land.”

Fortunately, the failures of Trumpcare and Obama­care represent a rare opportunity to get Democrats and Republicans to work together. Put House Speaker Paul Ryan and House Minority Leader Nancy Pelosi in the same room, and they might agree on, drum roll, Medicare Part C for All.

Politically speaking, Medicare has joint parentage. Parts A and B are Democratic initiatives. Parts C and D are Republican. Traditional Medicare combines Parts A, B and D. Part C, also called Medicare Advantage, is an alternative. Part C participants enroll with an insurance company, which is often a health-maintenance organization. The company then covers the participant for what’s covered under traditional Medicare.

The government pays the chosen insurer. The payment is based on the expected costs of covering the participant for the year. This calculation incorporates the participant’s pre-existing conditions as well as geographic location. Participants can switch insurers annually.

Because they get a fixed payment, which includes a profit margin, for each Part C participant, insurers have an incentive to neither underprovide nor overprovide care. Underprovide, and their customers won’t re-enroll. Overprovide, and their costs rise. Either way, the insurer’s profits fall.

Part C has been around since 1997. It’s popular. One in three Medicare participants — 17.6 million people — are in Part C. That’s up from 5.3 million in 2004. Hence, we have a tried-and-true federal system already in place to deliver universal health care.

Best yet, both parties can embrace Medicare Part C for All. Since the poor are sicker on average, this plan is highly progressive. That’s something Democrats want. But setting a fixed amount per participant imposes a budget on what Uncle Sam spends. It also improves incentives and promotes competition. Finally, it gets employers out of the health-insurance business. Those are things the GOP wants.

Sen. Bernie Sanders campaigned on traditional Medicare for all. Surely he and other Democrats would prefer Medicare C for All to the current system. As for the Republicans, Medicare C for All is very close to the bill sponsored by Rep. Pete Sessions, R-Texas, and Sen. Bill Cassidy, R-Louisiana. (It’s also my Purple Health Plan in drag.)

Who pays? We all would pay via our progressive income tax and Medicare premium systems, plus copays (regulated and capped) charged by Advantage plans. Moreover, wages now paid as employer-provided health-insurance premiums will be taxed. Finally, all federal and state funds spent on Medicaid and Obamacare would be available to cover Medicare C for All.

As for making the transition politically palatable, those over 60 could be grandfathered under current Medicare rules (i.e., be given access from age 65 on to traditional Medicare).

And employers could maintain their plans, but without any tax break. Eventually, everyone would be in C. This will eliminate the big problem with C, namely C participants switching to traditional Medicare to overuse the health-care system.

If you like this solution, make it happen. If you don’t, push a reasonable alternative. Unfortunately, you can’t afford to sit on your hands.

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