Below is my checklist for a complete Medicare premium support proposal. (I’ve never seen one in the wild.) It’s subject to change, and you can participate in changing it. Suggest additions in the comments.
- Competitive bidding, of course (What’s that? More here.)
- No cap on Medicare spending growth that isn’t somehow sensitive to spending growth of the entire health system (It is not credible to me that we will maintain a growing divergence between what Medicare can afford and what is standard in the rest of the market.)
- FFS Medicare included among the competing plans (Why? See this. Apart from competitive effects, what’s the value of private plans anyway? Choice.)
- Overseen by an IPAB-like board to minimize political meddling (more here) and to permit more rapid response by FFS Medicare to changes in consumer demand and the state of medical science (more here)
- Income-sensitive subsidies and programs to protect the poor (as exist in Medicare today)
- Risk-adjusted subsidies to protect the sick (advanced reading on this topic here)
- Safeguards in case risk-adjustment is insufficient (more here)
- Safeguards to (try to) ensure plans are accountable for good quality (more here)
- Ample assistance to help beneficiaries select plans (more here)
- Required minimum plan generosity, e.g. must include all current Medicare benefits (more here)
- Adequate access to private plan data for research purposes (don’t get me started)
- Doesn’t discard current Medicare experiments, which include promotion of bundled payments, ACOs, comparative effectiveness research, etc. (Their success is no more or less certain than competitive bidding. They can all co-exist.)
- Legal safe harbor for plans that shape benefits based on (somehow) sanctioned evidence (more here)
- Legal safe harbor for providers that employ shared decision making (more here)
- Rationalizing the role of Medicare supplements (or eliminating them entirely) so they don’t lead to increased taxpayer costs (more here)
- Implemented gradually and with some delay. Near retirees should be afforded time to prepare. The market should be afforded time to adjust.
- Does something sensible about the Medicare hospice benefit (more here)
They’re all important, and many are included in most proposals or at least widely recognized issues. But, numbers 2 and 4 are central to many of the problems Medicare faces and yet are often overlooked. It would be nice to see premium support advocates acknowledge the possible need for numbers 7, 8, and 9. Ignoring number 11 is how we lose any chance of accountability in and improvement of our health system. Number 12 is not widely understood, setting up the false dichotomy between left and right options. Number 13 is a huge deal that almost nobody discusses. Number 14 may seem not so relevant to a proposal that pertains to insurance. But if one of the motivating ideas of premium support is to encourage and harness choice and consumerism, then consumers ought to be more fully involved in all aspects of their care. Providers ought not be penalized for attempting to facilitate that.
For all that, I want to conclude with what is, perhaps, the most crucial point. Proponents of premium support proposals that do not include all of the elements listed above (and more) may say or suggest that it will solve Medicare’s problems. Same goes for those who advocate for the reforms in the ACA. Though both can help, I don’t believe either is the full solution that is often suggested. Here’s why:
Contrary to what some may claim, competition among private (and public) plans alone is not going to bend the cost curve. […] What matters is whether public and private insurers can serve as more than pass-through entities. What matters is whether we are going to continue to use public or collective funds to pay for any and every medical technology that clever minds can invent, whether more effective than cheaper alternatives or not. If [FFS Medicare] can broadly apply the results of scientific scrutiny of treatment types, we ought to embrace it and be thankful. We ought to preserve and protect it if it will actually lead us where we need to go. If it cannot, then it is not evident it deserves special treatment. But, [without additional legal and regulatory support], it is also not clear how private plans will perform any better. Either way, there is more work to be done.
In this sense, [many] premium support [proposals are] red herring[s]. It’s something reasonable to wrestle with in the near term, but shouldn’t distract us from the longer term challenge we face: either we dramatically reduce the rate of growth in Medicare and the broader health system by being smarter about what public and private plans cover or we ratchet up taxes and premiums (or some of both). Premium support or not, this challenge will likely be with us for a long time to come. It’s reasonable to believe that either private or public plans could meet this challenge, but not without substantial changes to law, culture, and politics. Until those are addressed, nobody on either side of the debate can stand up and credibly claim they have a complete solution.
