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Friday, May 7, 2021

A radical proposal would turn Medicare into a kind of universal health insurance

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From the moment you get sick, Congress responds — not only to what it perceives as its voters’ priorities, but also to its lobbying interests.

And no group comes more than the insurance industry, with its ever-expanding reach into Congress, and in particular to senators of both parties. (Remember the mythology about how the senators refused to even be vetted on Capitol Hill by insurance lobbyists? That’s gone by the board.) This influence has made life difficult for Democrats trying to find ways to stabilize Medicare and to find ways to combat opioid addiction.

What is still of great value to these senators is, I believe, an option whose proponents now acknowledge might actually change the lives of millions of people — which is to say, the option we used to know as “universal health care.”

The majority of the Senate has now voted to open debate on a bill with a substantial chance of passing. One critic of the plan is Sen. Lindsey Graham, a Republican from South Carolina. Another Republican, Ohio Sen. Rob Portman, endorsed it yesterday.

The plan is called the “Biden-Alexander Medicare Guarantee Act.” I hope you’ve heard of it. If not, that’s because, although it has been proposed by Democrats for years, it has never even made it into the Senate.

What the bill promises is that, instead of relying on Washington to supply affordable insurance, Medicare would automatically pay for the treatments of people with serious conditions, such as cancer or diabetes. Medicare would pick up the tab, and people with preexisting conditions would be considered stable if they had been taking good care of themselves for some time.

Obviously, this is an ingenious and radical plan. In practical terms, it would reduce the number of people with high costs in an insurance system for which the costs are rising like never before.

A prerequisite for this kind of plan, however, is that it will take time to get people on board with it. And it will require some changes to the current Medicare program in order to make it work.

Well, the basic framework for that is already in place. Medicare pays a huge amount of money to doctors and other providers — around $2,500 per year per enrollee. (Medicare pays far less to hospitals and other providers — about $800 a year per enrollee.) But the real mission of Medicare is to cover elderly people. That’s very different from the mission of traditional private insurance.

The basic proposal to make this kind of scheme work is already in place. In 2011, Congress approved a cut in the payment rates for doctors, under a mechanism called the Sustainable Growth Rate, or SGR. This was designed to discourage excessive health-care spending, but at the same time to encourage care that was more likely to improve health and reduce hospitalizations, productivity losses and other costs.

Given the long delay in seriously considering the SGR, it has become clear that paying providers less for each Medicare beneficiary doesn’t do much to accomplish those goals.

In this sense, the so-called “Biden-Alexander” approach is a kind of temporary fix. The plan would reduce payments to doctors by a much less steep rate than is now mandated by the SGR. In a lot of ways, the plan is modelled on an earlier bipartisan effort, which involved a similar reduction in payments to providers.

But the important point is that the B-A-G legislation is a very tough package on providers. In addition to the reductions in Medicare payment rates, Medicare would cover the enormous administrative and private-insurance costs of the Medicare guarantee plan itself. And if there is a provision in the legislation that care isn’t provided when Medicare pays a provider more than Medicare would otherwise pay that provider, it would be necessary to deny payment to the provider.

If the “Biden-Alexander” bill passes, this big deal will get little notice. But in a lot of ways, it would turn Medicare into a kind of universal health insurance.

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