Now that President-elect Trump is beginning to form his Cabinet, there are many questions about how his administration will affect health care.
Mr. Trump has made it very clear that he intends to dismantle ObamaCare. Recently he has hinted at keeping certain provisions of the ACA in place. This week, with the appointment of Rep Tim Price to head the Health and Human Services (HHS), many Americans are left wondering what will happen to Medicare.
Mr Price has been outspoken in his support for the “privatization” of Medicare thru the use of vouchers. For the last several years, Paul Ryan and other Republican leaders have been touting a change to Medicare in order to safe money and increase benefits to Americans.
Democrats have rigidly opposed ANY modifications to the Medicare system.
Republicans now support the idea of “premium support”. Rep Price has been an ardent supporter of this movement. In this model, Medicare beneficiaries would purchase insurance from a group of selected plans.
These plans would compete directly with traditional insurers such as Humana, United, BCBC and others.
The government would contribute the same basic amount to all Medicare eligible beneficiaries. Patients would be given a choice—remain in the traditional Medicare program or “shop around” for a private option.
If an individual selects a more expensive plan or a plan with a lower deductible in the private market, they would pay the difference between the premium they choose and the amount that Medicare provides via a voucher.
If a beneficiary chooses a less expensive option, they would receive a rebate or extra benefits from the government. Interestingly, Trump has stated in the past that he does not support a voucher like program.
What Would This Mean for Medicare?
Competition and free market forces are likely to lower prices overall and improve the services that insurers provide—many private insurers will be competing to insure Medicare beneficiaries. Due to the sheer volume of customers, many private insurers would likely offer cheaper options and work to cash in on a “by volume” business.
By providing vouchers for Medicare, Republicans argue that they are providing more choice. Medicare, as you might expect, is burdened with lots of rules and regulations—many of which defy logic.
Currently, many physicians will not accept Medicare patients due to very poor rates of reimbursement and complex filing requirements. In addition, Medicare can refuse to pay claims for months at a time if they decide to make a rate change or computer system upgrade, for example. Physicians with are left with lags in reimbursement, which can affect their ability to meet monthly payroll for their employees.
I believe that if there is competition among insurers, more physicians may be likely to accept Medicare patients. Services to physicians and the process of filing claims would become less cumbersome when insurers compete for physician business. For health care consumers, more physician choices will improve access to care for older Americans.
In many regions across the U.S., patients now have very limited choice. By expanding the pool of available and accessible doctors, patients will be able to find the right doctor for them. I firmly believe that when patients are able to connect and engage with their physician, outcomes improve.
What Are Democrats Saying?
Democrats are adamantly opposed to these changes. They argue that by effectively “privatizing” Medicare that individual costs for beneficiaries will rise. They worry that those with multiple chronic medical conditions will be given a fixed amount of health care money to work with that they will incur significant “overage” expenses.
In addition, those opposed to the “privatization” model also argue that those who are more affluent and those that have fewer medical problems will be more likely to purchase a private insurance plan with a voucher—leaving those who remain in traditional Medicare plans older, sicker and more expensive. Medicare has long been a traditional Democratic Party campaign issue—often using fear of loss of benefits as a way to sway older voters.
Many Democrats have already come out strongly opposed to Rep Price’s appointment only hours after it was announced. However, due to changes in the filibuster rules made by Harry Reid and his colleagues a few years ago, it is unlikely that they will be able to mount a meaningful opposition to his confirmation.
Nearly one third of the 57 million Americans on Medicare are already on private Medicare Advantage plans. However, current Federal law limits the competition among more traditional insurers and there is no bidding against private plans.
The pieces are already in place for a voucher based system—but we must amend the law to move it forward and allow free market competition to evolve to a level where prices will be lowered.
In the next Congress, I expect we will see more debate on this issue. At the current rate of spending and under its current structure, Medicare is not going to be a viable way to care for Americans.
We must do something to modify the plan and provide CHOICE, ACCESS and HIGH QUALITY care to all Medicare eligible Americans.
The current system provides physicians with very poor reimbursement and ultimately, many doctors will no longer be able to care for Medicare patients—simply from an economic viability standpoint.
Medicare is broken—Congress must address it early in the session—we can no longer afford to stick our heads in the ground and allow Democrats to use the “saving Medicare” mantra as a rallying cry for every single election cycle.
As a physician I am fortunate—I have been given the privilege to care for another human being’s life.
To that end I say to Congress—both Democrat and Republican-- lets FIX a broken system and allow doctors to do their jobs—HEAL THE SICK.
Dr. Kevin Campbell is an assistant Professor of Medicine, Division of Cardiology, University of North Carolina and President, K-Roc Consulting LLC.