Years before the iPhone, flat-screen televisions, Facebook and Netflix, one of the most innovative changes in the U.S. took place in an unlikely area: Medicare.
With the passage of the Balanced Budget Act of 1997, Medicare beneficiaries were given the option to receive their benefits — often expanded benefits — through private health plans known as Part C plans or Medicare Advantage.
Today, a third of all Medicare recipients are enrolled in a Part C plan. Open enrollment each year heralds the hard-to-miss full page ads from some of the major insurance providers trying to entice subscribers. Humana, United Health Care, HMSA, AARP and Kaiser are a few of the major players.
Now momentum seems to be building at least within the Democratic Party for Medicare-For-All or a national single-payer health care system. The assumption is that this would essentially end the commercial health insurance industry in America.
But again, with a little innovation, private insurance companies could still get in on the action.
Conversion to a single-payer system doesn’t have to mean the end of private insurance options.
What if Medicare was available to everyone, but like the Medicare Advantage plans, commercial insurers were able to participate for all ages? Current plans would not have to disappear, but instead could compete with one another by providing different levels of benefits, much like many already do in the Part C marketplace.
Hospitals would be obligated to accept all plans willing to pay a minimum of basic Medicare reimbursement for services, and patients would not be stuck with huge bills for out-of-network care.
Traditional Medicare could still exist for those over 65, in addition to the Part C commercial plans. For those under that age, basic coverage would be funded by an increase in taxes, probably a hybrid of payroll, federal, and state taxes. Given how much the average American pays for their own private insurance, if those funds were made available for this government-sponsored program, the costs should be lower for everyone.
There would be no argument about pre-existing conditions, since the programs would follow the same rules as Medicare, which does not allow for exclusions on this basis.
Plans would be portable to any state in the U.S. since, at their base, they are all different versions of government-run Medicare. All children and adults would be offered coverage, and there would be no lifetime limit on coverage.
The commercial sector could still thrive by finding ways to gain greater efficiencies in an effort to stay in business. Although the government would be the entity paying the basic premiums for the plans, any additional coverage options could be paid directly by the consumers. These add-on benefits would cover additional services such as massage or chiropractic, or offer expanded amounts of basic care, like additional physical therapy sessions, home health services and long-term care.
What if Medicare was available to everyone, but like the Medicare Advantage plans, commercial insurers were able to participate for all ages?
Wellness efforts could be incentivized by lowering the cost of care for everyone, which could lead to greater government sponsorship of healthy initiatives with school lunches and exercise facilities.
The standardization of reimbursement to hospitals could also help with budgeting, as the total number of patients seen and cared for would be the basis on which payments were made, with less variation in the rates from different carriers.
Those hospitals that provide critical access would be subsidized as they are now. Physician practices would have an easier time with the administrative costs as the basic requirements for all plans would have to be similar, streamlining the current time spent on all of the paperwork.
The main difference from what we have today would be that instead of funding health care coverage through employment for those who are commercially insured, it would be funded through overall taxes that would cover everyone.
The government would be a single-payer, but the money would go to either facilities directly for those enrolled in standard plans, or to commercial payers for those enrolled in Advantage plans.
It’s a compromise that just might work for everyone.
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Kathleen Kozak, M.D., is an internal medicine physician at Straub Clinic and Hospital. She is also a part-time medical director for UHA Health Insurance and is the host of “The Body Show” on Hawaii Public Radio.