The proposed Medicare-X Choice Act could cost hospitals $800 billion over 10 years and significantly disrupt the health insurance exchanges, according to a study done on behalf of the American Hospital Association and the Federation of American Hospitals.
The Medicare-X Choice Act would build on the Medicare framework to establish a public insurance plan offered on the individual and small business health exchanges, allowing consumers to choose an existing private insurance or a government-run health plan.
It would use Medicare's network of doctors, require similar reimbursement rates, and guarantee the essential health benefits established in the Affordable Care Act. It would also ensure access to prescription drugs by offering prices negotiated in conjunction with the Medicare Part D program.
Medicare X would be disruptive to both the individual non-group and employer-sponsored health insurance markets, the study by KNG Health Consulting said. The bill could reduce hospital payments by nearly $800 billion over 10 years.
Presumably this is due to the lower reimbursement rate hospitals receive from Medicare than private insurance. Providers are already absorbing more than $200 billion in Medicare cuts under new public plans, the study said.
The study further finds the bill would result in only a modest increase in the number of consumers who would be insured, compared to how many people would gain coverage under the current framework.
Most Americans are satisfied with their current coverage, America's Health Insurance Plans said. An estimated 180 million are covered through their jobs, 22 million through Medicare Advantage, 55 million through Medicaid managed care and 20 million who buy their own coverage.
Democratic Senators Michael Bennet of Colorado and Tim Kaine of Virginia introduced the Medicare X legislation in 2017. The bill was referred to the Senate Finance Committee.
The bill is grabbing attention now as another Medicare for All option that has become a 2020 election issue. There are also many public option proposals being floated at the state level as well.
WHAT ELSE YOU NEED TO KNOW
The Medicare-X plan initially would be available in areas where there is a shortage of insurers or higher health care costs due to less competition, according to the information on Bennet's Senate website. By 2023, Medicare-X would expand to every zip code in the country and by 2024, the public plan would be added as another option on the Small Business Health Options Program Marketplace.
Bennet and Kaine introduced the bill shortly after President Trump announced an end to the cost-sharing reduction payments to insurers, which destabilized the market and caused premiums to rise in 2018.
In 2019, the Administration allow insurers to make up for the loss of the CSR payments through silver loading. This allowed insurers to charge a higher premium for silver plans in the ACA market, but the cost was still borne by the federal government as subsidies rose with the price.
ON THE RECORD
"It is not practical to disrupt coverage provided through employer-sponsored plans that already cover more than 150 million Americans," said AHA Executive Vice President Tom Nickels. "America's hospitals and health systems remain committed to working together with policymakers to help expand coverage and reduce costs for all Americans. However, a 'Medicare for All' approach would impede, not advance, our shared goals."
"Medicare X is a slippery slope to government-run healthcare," AHIP said. "The American people want healthcare that works for them – not a one-size-fits-all health care system.
"In rural communities, limited competition is leaving many Coloradans with fewer choices, and, in some cases, only one high-cost option," Bennet said. "Medicare-X is a plan that begins to fix this problem by giving families and individuals a meaningful and affordable alternative."
"I want Virginians - and all Americans - to have more healthcare choices," Kaine said. "By creating an affordable Medicare-X policy, consumers can compare it with available private options and make the choice best for their health."
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