Established in 1965, Medicare now covers nearly 48 million seniors and an additional 9 million people with disabilities. For information about Medicare, read our previous blogs or our Quick Guide to Medicare. Congressional leaders have indicated that there are changes to Medicare on the way.
Medicare’s benefits can be accessed in two ways. Through traditional Medicare, services are covered as fee for service. Meaning that you can get medical care from any provider that accepts Medicare coverage. Alternatively, Medicare Advantage is a way to get Medicare coverage through a managed care plan (HMO or PPO). These managed care plans are offered by private health insurance companies and have specific networks of providers that are covered by the plan.
Throughout the contentious election season, President-elect Donald Trump, promised to preserve Medicare as is. However since the election, key Republican leaders have proposed changes to Medicare.
For example, U.S. Congressman Tom Price, a noted conservative who was recently nominated to be the next U.S. Secretary of Health and Human Services (HHS), has proposed, among other changes, moving Medicare to a voucher system. This would mean giving each individual a voucher worth a certain amount of money to go and buy private health insurance coverage. There are a number of potential challenges with this approach for consumers:
- If the ACA is repealed, many of the consumer protections will no longer be available
- It is unclear if the amount of the voucher will be enough to actually buy coverage. If it isn’t then individuals will have to pay more for their health insurance than they were paying under Medicare
- It is unclear what the individual health insurance market will look like and what plan options will be available
- It is unclear if those options will provide equal coverage to Medicare
- As seniors and people with disabilities often have higher medical expenses, they may be charged more for their coverage and plans may be too expensive for people to buy
Congressman Price’s nomination to lead HHS, which has control over Medicare, has caused many to question the validity of President-elect Trump’s campaign promise to protect Medicare.
Speaker of the House Paul Ryan has also championed a voucher system, which he calls “premium support.” In his 2016 proposal entitled “A Better Way,” Ryan makes several recommendations. Under his plan, the Medicare eligibility age would be raised from 65 to 67 by 2020. Then in 2024, “Medicare beneficiaries would be given a choice of private plans competing alongside the traditional Medicare program on a newly created Medicare Exchange.” Increasing subsidies for Medicare Advantage and allowing private insurers to offer a variety of coverage levels is suggested as well. Unfortunately, consumers who choose plans with more comprehensive coverage and flexibility may be required to pay the difference.
Some economists say that a privatized Medicare Advantage would be more efficient and enhance benefits to consumers while decreasing the cost to taxpayers. Other experts say that Medicare would not automatically be more efficient if privatized. They argue that Medicare already efficient and the projected savings privatized Medicare Advantage was supposed to provide have not materialized.
Additionally, both Price’s and Ryan’s proposals leave out important details. For instance, how much money would be given to individuals to purchase insurance? Would benefits be guaranteed? How would the quality of coverage be monitored and ensured? Would subsidies increase in proportion to the rising cost of healthcare?
Exactly what, if any, changes will be implemented is still unclear. Not every member of Congress who is committed to repealing the Affordable Care Act, also thinks that making changes to Medicare should be their top priority. Those who do want to make changes to Medicare have different opinions on how to do so.
One thing is certain: these proposed changes have caused considerable anxiety for Medicare recipients and their advocates. Triage Cancer will continue to follow this issue and share information as we receive it. Stay tuned to our blog and newsletter for the latest information.