By Kirk Wilson
We have heard much recently about Medicare for All. Why? Here are some reasons:
Reason No. 1. Insuring all people who are currently uninsured can only be a good thing. Obamacare, in its current set-up, falls woefully short of doing so.
Reason No. 2. No one involved in either paying insurance premiums, or the co-pays and co-insurance of care received, will argue that the current system is efficient or makes sense.
Reason No. 3. Lessening the redundancy and complexity of contracting, billing, adjudication and collection activity for both providers and insurers surely would save billions of dollars. Few people will argue that any of the individuals involved in these administrative processes contribute anything to actual patient care.
If the billions of dollars now spent on non-productive health care financing activities could be redistributed — and if employers and employees paid an amount similar to what they pay today for their portion of health care insurance premiums — there would be more than enough money to pay for Medicare for All, or what I call “M4A.” There are plenty of smart consultants who can be engaged to figure out the details and provide services to make it work smoothly.
All politicians know that not many Americans are willing to give up the option of private health insurance, and that no insurance company is willing to abandon the market. The biggest problem seems to be finding a way to protect these options and fairly and adequately finance M4A, without new taxes or unnecessary windfalls. There is a reasonable plan for legislating a workable M4A program. It would be supported by several funding sources, as follows:
Source No. 1, Business: The IRS would determine from business tax returns the average health care insurance premiums paid by each employer on behalf of their employees for the past three tax years. If this information is not reported on returns, all businesses would be required to submit this data. On the effective date of M4A, businesses would be required to pay this same amount going forward as an additional Medicare tax. (This would eliminate any windfall for businesses from M4A.)
Source No. 2, Employees: The Medicare tax on employees would be raised to 9 percent on the first $500,000 of income. This would offset the average employee share of insurance premiums paid today.
Source No. 3, Government: Redundant CHIP and Medicaid programs, with the exception of ESRD and long-term care benefits, would be eliminated. This would save both state and federal agencies billions of dollars in redundant program costs, and would allow those dollars to help pay for M4A.
Two important corollary actions would be needed.
- All health care providers licensed in the United States would be required to participate in M4A and accept the prevailing and applicable Medicare part A, B, C or D payment rates. This would offset the lack of any payment from current uninsured patients and any windfall that providers might receive from the savings realized from eliminating many costs of contracting and claims adjudication. Pharmacies and drug makers would also be required to accept Medicare rates.
- Any insurers wishing to provide any form of health care insurance in this country would be required to participate in Medicare Part C in any state in which the providers operate. This would assure availability of this key coverage option and offset any windfall that insurers might garner from simplifying their contracting and claims management functions.
No further taxation should be necessary to fund an M4A program, despite what the pundits say. Medicare should be left exactly as it is but expanded to include every citizen of the United States plus any non-citizens who pay employee Medicare taxes.
Those who enjoy private insurance may choose Medicare part C, just as many current Medicare recipients do. People will find that Part C insurance replicates their current private insurance to a great degree. If their incomes are sufficiently high they will also pay higher Medicare part B/D premiums just as current high income Medicare recipients do, further funding an M4All system.
Obviously, there are many additional changes that may need to be made, including the obvious elimination of Obamacare, but the current health care financing free-for-all is neither sustainable nor productive. America wastes 4 percent of its GDP on the administrative side of health care financing. M4A would make a great deal of sense if the financing occurs as described above, Medicare Part C is maintained, and windfalls are eliminated.
Kirk G. Wilson is a life fellow of the American College of Healthcare Executives and a former CEO of St. Joseph’s Hospital of Atlanta. He describes himself as a “happy Medicare Part C participant.”