In a sign that the Clinton-Obama wing of the Democratic party has moved left, last week the Center for American Progress proposed Medicare Extra, universal national health insurance for everyone without health insurance and everyone else who would prefer it to the coverage they have. Unlike the Sanders plan, CAP proposes a multi-payer plan that allows everyone with insurance to keep what they have if they like it. The plan has many advantages over more modest Medicare for all proposals, but it allows commercial for-profit health plans to remain in the mix, driving up costs and threatening the traditional Medicare-like plan it proposes.
Medicare Extra is an enhanced version of Medicare, filling most of its gaps and providing significantly more coverage. Much like Sanders’ Medicare for All plan, in addition to the standard Medicare benefits, this government plan would cover vision, hearing and dental care as well as long term care supports and services. The coverage would be automatic for anyone without health insurance, everyone turning 65, and everyone at birth; and, it is available to everyone else who chooses it over the coverage they currently have.
To its credit, CAP recognizes that we cannot rely on commercial health insurers to guarantee good affordable coverage in America. It further appreciates that we cannot rely on states to ensure access to care for their residents. And, it relies on the federal government to regulate prices for its Medicare Extra plan because “competition” cannot and has not reined prices in. These are all important lessons learned from the Affordable Care Act.
Like the Sanders plan, Medicare Extra (essentially traditional Medicare with expanded benefits) is administered by the federal government. But, CAP does not go as far as Sanders to eliminate commercial insurance. Rather, CAP attempts to do a better job of leveling the playing field between commercial insurance and the government plan, a Sisyphisian task. And, likely, the CAP plan’s Achilles heel.
As we have seen over the decades and most recently with the ACA, if given any latitude, commercial health insurers will always design their health plans to avoid enrolling people with costly conditions, keeping their networks free of centers of excellence and top specialists. They will never reveal the value of their coverage for people who develop complex conditions, such as heart disease, cancer, stroke or diabetes. Moreover, government has never been able to oversee them effectively or prevent them from committing fraud, wrongly denying care and otherwise keeping the public in the dark about what they offer their members. CAP envisions reining the commercial health plans in significantly more than Medicare Advantage plans, but it is hard to understand how it will be enough.
Unlike Sanders, CAP also allows people with employer coverage and Medicare to keep the coverage they currently have if they so choose. People with Medicaid would be enrolled in Medicare Extra. And, everyone enrolled in Medicare Extra has the choice of this government-administered traditional-Medicare-like plan or Medicare Choice, essentially a commercial Medicare Advantage plan with expanded benefits. It goes without saying that the added administrative costs of all these options are considerable, especially if there is appropriate oversight of the commercial plans.
CAP has yet to model the financing for its proposal, which relies on wealthier Americans to pay more and provides free coverage to people under 150 percent of the federal poverty level. But, CAP expects that Americans earning more than 500 percent of the federal poverty level, just over $60,000 a year for an individual ($104,000 for a couple), would spend 10 percent of their after-tax income for their health insurance, as well as about 20 percent coinsurance, which is likely to make it unaffordable to many.
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