09/27/2019
Summer 2019
Medicare for All?
You must have heard it; everybody is talking about it. “Medicare for All “
When the republican congress started the push for the “repeal and replace” of the Affordable Care Act or ACA, I wrote about how this would speed up the train leading to a universal health proposal now being presented as Medicare for All. Before we get into what that means, let’s review how Medicare works.
On the first of the month in which an American citizen with 40 quarters of qualifying coverage turn 65, you are eligible for Medicare. The government part of it is called Medicare parts A and B. Generally speaking part A covers inpatient, hospital expenses and part B covers doctor visits. Part A is automatic and free as you have paid taxes for years to get this benefit. Part B is optional, and if you choose to enroll in it a monthly premium will be deducted from your social security payment when you start collecting. The current premium for Part B is $135.50 in 2019 but if your AGI is above $170,000 you will be asked to pay more.
Both Medicare parts A and B have deductibles, copayments and limits. To deal with these “holes” in coverage you may choose to purchase a supplemental plan from an insurance company. There are two options for this. The first one is assigning your part B payment to a Medicare Advantage HMO type plan which then becomes your primary and only insurance and manages all aspects of your coverage. You must choose an in-network primary doctor, prescriptions drugs are included and there is no premium or only a nominal one. Advantage plans are good because they are a self-contained plan, no claims, no surprises. But just like in an HMO, your doctor is the gatekeeper of your coverage and this may limit access to care.
The second option is to purchase a Medicare supplement plan, which is a PPO type of coverage that sits as a secondary policy and helps pay what your A and B coverages don’t pay. Prescriptions drugs are not included so if you decide to go this way you will need to purchase yet another plan, a Part D prescription drugs plan. Medicare supplement plans offer choice and freedom to manage your health care and foreign coverage while you travel but you end up with additional premiums. For what is worth it, I have been in Medicare plus a Medicare PPO supplement and a Part D plan for almost two years and never had better coverage in my life at a lower price. Medicare works and there are plenty of plans out there to supplement its limitations. It is important to note that the cost of a Medicare supplement plan is a fraction of what a regular medical plan cost!
So, when people talk about “Medicare for All”, what do they mean?
The answer to this question is complicated. Some democratic candidates like Biden or Klobuchar would like to build on top of Obamacare, add a Medicare style public option and shore up the federal funding for people who qualify for subsidized insurance. Theirs is a gradual approach and private insurance has a place in it. On the other end, Sanders and Warren want to expand Medicare for all Americans ruling out private insurance even if it is provided by an employer or union. In the middle, candidates like Harris and Buttigieg have an approach that combines access to Medicare through a public option for anybody that wants, while keeping private insurance for those who so desire. All these different solutions are highly fluid, and the democratic candidates are expected to come up with more defined plans in the months to come, and well as ways to fund them. All this is in contrast with the republican plan, oh wait, my bad, the republicans do not have a plan. But what they do have is a great instinct to go negative and most Americans do not want to give up their health plan and want to continue seeing their doctor and these are concerns that will be tapped from now to the end of 2020.
The California Assembly has been busy responding to threats to the ACA from the federal government. In anticipation of federal funding being discontinued, California is planning to subsidize the cost of insurance for applicants who qualify and to help pay for these subsidies the legislature would create a state health insurance mandate, replacing the federal fine for not carrying insurance that was terminated at the end of 2018.
Obviously, we have an interest in private insurance having a role in whatever solution we find. In all the developed western democracies, health insurance is considered a right, not a privilege. The US is the only country that somehow has, for now, failed to find an answer that covers all Americans in a fair and equitable way. Western European countries have found a way for private insurance to complement and expand universal access. We all want coverage for all, but nobody wants to wait for months for a procedure if we think it is important to our well-being.
What is clear is that in the 2020 election, access to health care is going to be one of the most important issues. We believe that all Americans should have the right to health insurance, that preconditions are a thing of the past, and that how we get there is just a matter of time and details.
We’ll keep you posted, and please call with any questions.
