Legislative REVIEW VOL. XXIV, ISSUE 2 FEBRUARY 2019 Medicare-For-All Has Many Meanings Letter from Karen Knippen The drumbeat for further expansion of healthcare is likely For the past decade our focus has been on Congress to continue with Democrats in the majority in the House. with passage and implementation of the ACA. On the one hand, Democrats must continue pursuing Medicaid-for-All and other health care proposals healthcare since healthcare was seen as a driving force may return attention to the states. What is most likely behind Democratic wins in the mid-term elections. On the is that we’ll see activity on these and other health other hand, the more progressive wing of the party with coverage proposals at both state and federal levels. standard bearer Bernie Sanders has made healthcare and Medicare-for-All a cornerstone of their movement. In the meantime, employers are facing many of the same questions. How can they provide quality health Efforts are already underway in Congress to pursue coverage that is affordable? What benefits do their Medicare-for-All. A Medicare-for-All Caucus in the House employees want and need? What benefits should they of Representatives already has more than 70 members. consider that they don’t currently offer to attract and retain valued employees? And, all of the legislative debate will not be confined to the federal legislature. As many as 10 states are Euclid Managers can help you answer these questions already exploring healthcare expansion options such for your clients. Call your marketing representative to as Medicaid buy-ins. Several states including New York, learn about everything we have to offer. California and Colorado have also explored such health- care expansion programs in recent years. In 2014, Vermont abandoned its effort to establish the first Sincerely yours, state-level single payer plan due to the massive tax increases, including an 11.5% payroll tax, which would have been necessary to finance the plan. Karen Knippen, RHU, REBC Senior Vice President Campaign and election promises are often vague or ill-defined. And, most often, rhetoric and what can be passed and enacted into law are miles apart. At the nub EUCLID MANAGERS has been serving the independent agent of any of the proposals is the idea of expanding access to since 1976 with a portfolio of group health, life, disability, dental and individual health. We proudly represent UnitedHealthcare healthcare. Proposals vary from those that eliminate of Illinois, Delta Dental of Illinois, MetLife and UnitedHealthOne private insurance entirely to those that would allow Individual. We encourage your feedback and suggestions. individuals to choose between private or government Please call your EUCLID MANAGERS Marketing Representative run programs. or Marcy Graefen at (630) 238-2915 for more information. Website: www.euclidmanagers.com continued on page 2 The information contained in this publication is intended for the general information of our clients. It should not be construed as legal advice or legal opinion regarding any specific or factual situation. Legislative REVIEW So it is with the discussions regarding Medicare-for-All A critical factor in any cost estimate is the cost to and similar pronouncements. This issue of Legislative patients at the time of care. Some proponents of Review explores the landscape of the healthcare Medicare-for-All eschew any patient cost-sharing. expansion and Medicare-for-All discussions. Adoption of such a plan is clearly the more expensive option. Expenses could mount beyond estimates if the Costs Driving Dialogue absence of cost-sharing leads to overutilization of medical services. It comes as no surprise that rising health costs – especially drug costs – are catalysts for government Another obstacle to Medicare-for-All is keeping to have a bigger role in health coverage. It is common medical providers – especially hospitals – in the across many proposals that government will have a greater market. The American Hospital Association Annual role including setting prices for health care services. Survey of Hospitals found that Medicare reimbursement was $53.9 billion below hospital costs of treating The role of employers in providing coverage is another beneficiaries in 2017. Traditionally, uncompensated point under contention. Employer-provided coverage care which includes underpayments by Medicare and has been threatened by Republicans and Democrats. Medicaid as well as care provided to the uninsured is Republicans have long sought to decouple the significant partially offset by charging private payers more than tax breaks employers and employees enjoy when an the actual cost of care. If there are no private payers, employer sponsors coverage. Democrats see employer this “cost-shift” goes away. Whether hospitals can provided coverage as an obstacle to the broader effort remain financially viable or whether the numbers to have universal coverage. of hospitals would be dramatically reduced will be important questions to be considered. Medicare-for-All Medicare-Buy-In Medicare-for-All is shorthand for a program that would cover all Americans under a government A Medicare-Buy-In can address the high premium costs insurance plan. Proposals often differ on whether the faced by older individuals under age 65 who are not yet plan would merely extend existing Medicare to all or eligible for Medicare. The Affordable Care Act (ACA) age whether Medicare would itself change to accommodate rates coverage in the individual market. As such, older this new mission. individuals face premiums that become increasingly high, especially if the individual does not qualify for ACA’s The biggest obstacle to Medicare-for-All is cost. premium subsidies. An analysis of Bernie Sander’s plan by the Urban Instituteestimated a cost of $32 trillion over 10 years. Whether a buy-in program can co-exist with employer- Of particular note, the Urban Institute is considered a based coverage is also a question. Older employees with left-leaning organization making their analysis hard to a choice of remaining in their employer plan or enrolling overlook by Medicare-for-All advocates. in a buy-in program could result in adverse selection for the buy-in plan. 2 www.euclidmanagers.com Legislative REVIEW Another iteration of the buy-in plan would allow Single Payer employers to pay for the buy-in plan through a payroll tax. Employers who preferred to offer their own plans would Fewer proponents of expanding coverage use the be required to meet stricter federal benefit standards. term “single payer.” But, “single payer” is not always a synonym for Medicare-for-All or other proposals. “Single Yet another Medicare-Buy-In plan would allow small payer” can mean how care is funded but it can also mean employers to enroll their employees in an employer- how care is provided. sponsored buy-in plan. This option is considered most viable where the employer is in a section of the country At the extreme, “single payer” can mean that all that has only one insurer or excessively high health costs. hospitals are government run and that all physicians and medical services providers work for the government. The buy-in proposals assume that more Americans will “Single payer” can also mean that government is opt to enroll in coverage moving the needle toward responsible for paying all health care claims. universal coverage. But, absent a requirement to do so, universal coverage is unlikely to be achieved. One of the more seductive aspects of “single payer” is that it contemplates no insurance claim hassle. A person A proposal from the Center for American Progress needing care gets it. Any paperwork is typically between would initially include a buy-in option. At some point, the medical providers and the government. however, all newborns would be enrolled upon birth into a government plan to achieve universal coverage. One of the most feared aspects of a “single payer” system is the likelihood of rationing of care. In order Medicaid-Buy-In to keep costs in check, the levers are either reductions in access or reductions in care provided. Americans are used to the current system which offers abundant access Medicaid-Buy-In plans are aimed at lower wage to technologically sophisticated care with little waiting workers. The theory is that lower wage workers have time to access it. Whether Americans will accept difficulty affording plans that their employers may offer. increased wait times or less access to high tech services Furthermore, ACA subsidies may make premiums is of concern. affordable in the individual marketplace but coverage barriers such as high deductibles or cost sharing will ACA Still In Force still be problematic. In the background of these debates will be the future of Medicaid-Buy-In plans face many of the same hurdles the ACA. With loss of the House, Republicans are unlikely of Medicare-Buy-In plans. Medicaid also faces a dearth to resurrect their failed effort to “repeal and replace” the of health care providers willing to accept Medicaid ACA. The Democrats are unlikely to find sufficient support reimbursement levels which are generally lower in the Republican controlled Senate to move forward with than Medicare’s. ACA fixes or expansions. The biggest threat to the ACA may be the Court case regarding the elimination of the A Medicaid-Buy-In strategy has an advantage in that it individual mandate penalty which is expected to make likely could be implemented on a state-by-state basis. its way to the Supreme Court. www.euclidmanagers.com 3 Legislative REVIEW A service publication for brokers from Euclid Managers, proudly representing UnitedHealthcare of Illinois, Delta Dental of Illinois, MetLife and UnitedHealthOne. HealthiestYou and LifeLock available through Euclid Managers Concierge Services. www.euclidmanagers.com Legislative Review is published by Euclid Managers, 234 Spring Lake Drive, Itasca, IL 60143.