Friday, May 5, 2017

"Medicare for all" or Public Option

Medicare for all has been a popular refrain, but there are a couple of points that need to be mentioned.

First, most other countries have a system that is a combination of "government" services plus private-pay providers, with the system knit together by some form of private insurance. I don't know the details, but the main difference between Canada and the UK, for example, is that Canadian Medicare is virtually all-encompassing (administered at the provincial level, not nationally) with no private insurance -- though I have read that some private insurance and providers do exist. Britain's NHS, on the other hand, is a universal provider for everyone, but the services (and wait times) are replicated privately, augmented by a robust private insurance alternative for those who can afford them. A series of reports at The Health Care Blog several years ago offered a first-person report by an American physician who went to Britain to see for himself. His reports were fascinating, and I was left with the impression that NHS is more comparable to our own Medicaid than Medicare -- and he specifically said many Brits never darken the door of a NHS facility. However he underscored the fact that in the case of any emergency or for some complicated cases NHS was preferable to any private providers.

That said, I decided some time ago that a public option is a better alternative -- using the exchanges already in place -- than displacing everything with Medicare for all. That would truly satisfy those cries about choices. And if you like your doctor (and insurance) and want to keep it -- and can afford to do so -- good for you.

A word about American Medicare

Most people don't realize that Original Medicare has been slowly losing beneficiaries for the last few years with the advent of the misleadingly named Medicare Advantage private alternatives. MA is basically the cleaned up version of PPO and/or HMO "health maintenance" systems -- all privately organized and knit together by a private insurance company. About a third of all Medicare eligible people are no longer beneficiaries of Medicare, having been kidnapped by the MA private sector alternative.

I am familiar with both Original Medicare and Medicare Advantage because my wife and I have been with both. When we first qualified for Medicare a MA plan was available in our area and we both decided for that -- not knowing all the details, but attracted by the bizarre fact that not only did we not need supplemental insurance, but that the "premium" for MA was ZERO!
I was mystified, but that was the case and the attraction was irresistible.

At the end of that year, that particular MA plan was discontinued for our county, and we then faced two options: either return to original Medicare (plus a supplement) or enroll in a different MA plan from a different insurance company. By then we had learned that original Medicare is a better option for someone with a complicated medical picture (read "expensive") but for someone in pretty good health, MA is less expensive.

MA vs original Medicare is the senior version of what the insurance people call "adverse selection" with MA being the senior analogue to young people who don't expect to have expensive health care, but who hit the wall should they get hit with a catastrophic medical problem (or combination of issues).

So here is the dirty little secret not widely known about PPACA: once someone has been enrolled in Medicare Advantage, the price of returning to original Medicare can be steep -- in the form of "medical underwriting" which is essentially the equivalent of having a preexisting condition. It's like life insurance. The older and/or sicker you are, the more the insurance will cost. (That "community rating" system the GOP wants to retroactively make optional for the states never left for the Medicare set. Think "preexisting conditions" writ large.)

Which brings us back to the "Medicare for all" discussion. Most people don't realize that Medicare does NOT cover 100% of medical costs. Thanks to a lifetime of payroll taxes only 80% of charges are covered. The other 20% of medical bills is the responsibility of the beneficiary. The beneficiary then faces two choices -- pay out of pocket, OR pay for supplemental insurance covering the other 20% -- and even then, there will be co-pays, deductibles and limitations that come with private insurance.

It becomes a damned if you do, damned if you don't choice. And in the end, American health care remains a rationing system -- rationed by affordability.
And anyone who wants to pay privately is welcome to do so -- hence a thriving field of cosmetic and other options, including medical tourism. But when the money runs out, and "spending down" depletes enough assets, the safety net finally becomes Medicaid.

And that is a completely different conversation...

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