Medicare provides health insurance for older Americans and to those with disabilities, but a new proposal might make it available to almost anyone who cares to buy in.
With midterm elections coming up, it appears that Democrats have settled on healthcare as a main issue to run on. As such, there are at least five new plans circulating with the idea of expanding health care provided through the federal government.
The latest plan (brought forward by senators Chris Murphy, of Connecticut, and Jeff Merkley, of Oregon) is called the “Choose Medicare Plan.” It would allow for individuals — or the companies they work for — to buy Medicare like they would for any privately-offered health plans.
Should the plan get the green light, how will it pan out? What would it mean for the health insurance market?
Ryan McKenna, PhD, an assistant professor in the Drexel’s Dornsife School of Public Health, studies health insurance reform and the public policy surrounding it. Here, he sheds some light on what this new bill might look like if it were applied.
- Expanded — Not Universal — Coverage
The bill does not guarantee universal coverage, but represents a public option on the healthcare exchanges, or Medicare Part “E”.
It would allow non-elderly individuals who earn between 100 and 600 percent of the federal poverty line (that line stands at roughly $25,000 for a family of four this year) to purchase subsidized insurance, including Medicare coverage on Affordable Care Act marketplaces. The current cutoff sits at 400 percent of the federal poverty line and allows individuals to purchase private plans only.
However, those caught in the coverage gap in non-expansion states would receive no extra benefits.
Additionally, like the current structure of the marketplaces, undocumented individuals would not be allowed to participate.
- Increased Competition
More competition would be created, as well as additional options for rating areas without many insurers under the proposed bill. Due to uncertainty in the marketplaces, low profitability, and health insurance repeal/reform efforts, the marketplaces suffered a number of high-profile exits from insurers in 2017.
The Kaiser Family Foundation estimates that in 2018, approximately 26 percent of exchange enrollees had only one insurer to choose from. Adding Medicare into the mix would increase competition, so one benefit could be lower premiums.
Additionally, under Medicare Part E, any doctor participating in Medicare will have to accept Part E enrollees. Given that approximately 93 percent of non-pediatric primary care physicians do participate in Medicare now, this will create relatively generous provider networks.
- Adverse Selection
Despite the fact that these plans must be priced like other ACA plans, making them affordable could potentially be difficult. That’s because Medicare currently insures very few nonelderly individuals and there are a few challenges being thrown into the mix.
In 2019, the financial penalty on the individual mandate will be removed, so some people might completely opt out of buying health insurance. Additionally, wider networks might mean doctors see a disproportionate amount of people who frequently need to utilize health care.
These two forces could result in premiums going up. It is not a certainty, but it’s something to pay attention to if Part E passes.
Any media interested in speaking to McKenna should contact Frank Otto at 215.571.4244 or fmo26@drexel.edu.
