Sens. Merkley & Murphy introduce "Choose Medicare" Act

2019 OPEN ENROLLMENT ENDS (most states)

Time: D H M S

Jonathan Cohn of the Huffington Post has the skinny:

Two more Democratic senators are introducing a bill that would create a version of Medicare for some working-age Americans, offering yet another sign that government-run insurance will figure prominently into the Democratic Party’s health care agenda going forward.

By my count, there are now a total of 5 different Universal Coverage policies officially on the table from Congressional Democrats, in addition to the two "ACA 2.0" bills proposed (both of which are presumably meant as stopgap measures until one of the UC bills can also get passed and take hold and be implemented a few years later). These bills include ones from Bernie Sanders ("Medicare for All"); Tim Kaine/Michael Bennet ("Medicare X"); Brian Schatz ("Medicaid Option"); and my preferred option of those I've seen so far, the plan from the Center for American Progress ("Medicare Extra"). The newest entry from Sen. Merkley & Murphy is apparently called "Medicare Part E":

Sens. Jeff Merkley (Ore.) and Chris Murphy (Conn.) plan on Wednesday to introduce the “Choose Medicare Act,” which would launch a new, enhanced version of traditional Medicare. It would be available both to individual consumers buying their own coverage and employers who offer coverage to employees.

It’s possible to imagine Medicare Part E, as Merkley and Murphy propose to call the new program, someday absorbing most working-age people who don’t qualify for Medicaid.

...Medicare Part E would include two features of commercial insurance that traditional Medicare, which serves seniors, does not: a limit on out-of-pocket spending and coverage of pediatric services.

It would have to finance itself, with premiums from beneficiaries covering outlays, just like a private insurance plan would. Medicare Part E would benefit from some of Medicare’s efficiencies ― among other things, by paying less for services than commercial insurance typically does. Merkley and Murphy are counting on that differential to make Medicare Part E competitive on price and coverage.

Consumers who buy coverage on their own could get Medicare Part E through HealthCare.gov or one of the state-run exchanges, using federal tax credits if they qualify. The tax credits would actually be more generous, and available to people at higher incomes, than they are under the current law.

The legislation wouldn’t only help people who opt into Medicare E. People who buy coverage on the exchanges but prefer to stick with private insurance would also be eligible for the bigger, more widely available tax credits.

Here's the official press release from Sen. Merkley's office:

U.S. Senators Jeff Merkley (D-Ore.) and Chris Murphy (D-Conn.), joined by U.S. Senators Kamala Harris (D-Calif.), Cory Booker (D-N.J.), Tammy Baldwin (D-Wis.), Brian Schatz (D-Hawaii), Jeanne Shaheen (D-N.H.), Martin Heinrich (D-N.M.), Richard Blumenthal (D-Conn.), Tom Udall (D-N.M.), and Kirsten Gillibrand (D-N.Y.), introduced on Wednesday the Choose Medicare Act to give every individual who is not already eligible for Medicaid or Medicare the opportunity to enroll in Medicare as an individual or every employer to purchase Medicare for their employees.

I should take a moment to note that many of these Senators have also signed on to one or more of the other 4 universal coverage bills being tossed around by Democrats these days...several of them are co-sponsoring Bernie Sanders' plan, of coruse, and Brian Schatz is co-sponsoring this proposal as well as his own Medicaid buy-in proposal.

In other words, just because you like one universal coverage proposal doesn't mean you have to crap all over a different one. There are some people who really, really need to get this through their heads.

"Every American deserves the promise of access to a popular, affordable, high-quality health care option," said Merkley. "Fortunately, we already have exactly such an option - and it’s called Medicare. The Choose Medicare Act creates a Medicare option for all, putting consumers and businesses in the driver’s seat on the pathway to universal health care." "People in Connecticut love Medicare. It’s popular, it’s patient friendly, and it’s cost effective. Every individual and every business should have the right to buy into Medicare, and our bill allows this to finally happen," said Murphy. "For those who think that Medicare is the right plan for all Americans, this bill puts that theory to test and allows for consumers and businesses to decide whether they want to remain on private insurance or switch to Medicare. Our belief is that the Medicare plan will be the most affordable and the most efficient, but we can't know that unless everyone is given the choice to purchase a Medicare plan."

This truly is the "Public Option" which most Democrats were praying for back in 2009-2010, although it doesn't appear to go as far as CAP's Medicare Extra (which starts out as an optional plan but eventually becomes mandatory for half the country), and obviously doesn't go as far as Bernie Sanders' "pure" Single Payer proposal, which would mandate 100% compulsary enrollment for everyone within a 4-year timeframe.

Booker said, "Every American deserves access to quality, affordable health insurance -- that should be a fundamental right. Our bill will provide more health insurance options for Americans by expanding Medicare to more people while also improving the program for existing enrollees."

"We need to work across party lines to make health care more affordable and to give Wisconsinites more choices to find quality, affordable health insurance," said Baldwin. "This legislation offers a new option for every American to buy more affordable, quality health care coverage through Medicare, and is a critical step to help reduce health insurance costs and increase competition."

Medicare is consistently rated the most popular and efficient health insurance system in the United States. The new plan, Medicare Part E, would be self-sustaining and fully paid for by premiums. Medicare Part E would be offered on all state and federal exchanges, and people could use the existing Affordable Care Act subsidies to help pay for it. Additionally, employers could choose to select Medicare Part E rather than private insurance to provide affordable and reliable health care to their employees. The full bill text is available here and a summary of the bill is available here.

Here's the main bullet points from the summary page:

Increases Access, Competition, and Choice

  • Opens Medicare to employers of all sizes and allows them to purchase high quality, affordable health care for their employees without requiring replacement of employment-based health insurance.
  • Gives employees the option to choose Medicare Part E over their employer coverage.
  • Addresses the discrepancy between consumer protections in the individual and group markets by extending the Affordable Care Act’s rating requirements to all markets, to end discrimination based on pre-existing conditions once and for all.

Provides Comprehensive Coverage

  • Covers essential health benefits and all items and services covered by Medicare.
  • Provides gold-level coverage.
  • Ensures coverage for all reproductive services.

Improves affordability

  • Establishes an out-out-pocket maximum in traditional Medicare.
  • Increases the generosity of premium tax credits and extends eligibility to middle-income earners.
  • Allows Medicare to negotiate fair prices for prescription drugs.
  • Drives down private insurance premiums with competition from Medicare.

Finally, here's some more details, including specifics about the beefed-up APTC subsidies from the text of the bill itself:

  • Page 6: Notes that premiums will vary depending on whether the plan is offered in the individual, small group or large group market (as well as the geographic rating area), just like the current setup for private policies
  • Page 7: Any doctor/hospital who currently takes Medicare has to take Medicare Part E enrollees. This would seem obvious, but it's important to make that clear.
  • Page 8: It would provide $2 billion to the HHS Secretary to establish/start up the Medicare Part E program nationally.
  • It would also give the HHS Secretary reserve funding to cover claims for the first 3 months of each year (which makes sense since there could be a huge surge of expensive claims which pop up early on before most of the annual premium payments come in for the rest of the year)
  • Page 9: As you might expect, this line won't sit well with Republicans at all: "‘‘(3) CLARIFICATION.—Any provision of law restricting the use of Federal funds with respect to any reproductive health service shall not apply to funds appropriated under paragraph (1) or (2)."
  • Page 13: The annual out-of-pocket limit cost to enrollees for deductibles/co-pays/etc. would be $6,700/year starting in 2020, with that amount chained to CPI after that.
  • Page 16: It includes the long-awaited rule allowing Medicare to negotiate drug prices. Good.
  • Page 19: It would upgrade the ACA's "benchmark plan" from Silver to Gold, just like the Senate version of the "ACA 2.0" bill does. Good.
  • Page 20: It would raise the cap for APTC tax credits from 400% to 600% of the Federal Poverty Line. While this is still far better than the current 400%, it's less generous than simply removing the 400% cap altogether...and it wouldn't beef up the APTC formula itself as both ACA 2.0 bills would. I find this rather interesting--it sounds like Merkley/Murphy are relying on Medicare paying providers about ~20% less than private insurance to do the "lower premium cost" trick instead.
  • Page 21: Since the benchmark plan is moved to Gold, so is the CSR baseline. The Actuarial Value ratings, which are currently set to 94% for those earning 100-150% FPL, 87% for those earning 150-200% FPL, and 73% for those earning 200-250% FPL, would be changed to the following:
    • 100-133% FPL: 94% AV
    • 133-150% FPL: 92% AV
    • 150-200% FPL: 90% AV
    • 200-300% FPL: 85% AV
    • 300-400% FPL: 80% AV

These are all improvements similar to both of the ACA 2.0 bills, except for the second bracket, which is actually slightly less generous than the current CSR formula for some reason. Those earning 133% - 150% FPL actually move backwards from 94% to 92% for some inexplicable reason. I'm assuming there's a good reason for this, likely tied to the Medicaid expansion cut-off point, but I can't see what that reason is at first glance.

  • Page 24: Woo-hoo! A $10 billion per-year, 3-year reinsurance program. This is either a nod to, or a poke in the eye to, Sen. Susan Collins, whose own failed "Alexander-Collins" bill would have included exactly this reinsurance funding last month.
  • Page 24: I'm not sure, but I think the "expanding rating rules to the large group market" has something to do with heading off Donald Trump's "Association Plan" executive order at the pass.
  • Page 25: Finally, there's this rather interesting coda to the bill: "It is the sense of the Congress that the Federal Government, acting in its capacity as an insurer, employer, or health care provider, should serve as a model for the Nation to ensure coverage of all reproductive services; and all restrictions on coverage of reproductive services in the prvate insurance market should end."

Yeah, that's not gonna go over well with some folks.