2020 OPEN ENROLLMENT ENDS (most states)

Time: D H M S

Sen. Merkley & Murphy roll out their pretty-damned-good "Choose Medicare" public option bill

NOTE: I'm adding some additional commentary to this post throughout the day, so reload it later on if you're curious about my thoughts, but I wanted to at least get the main info out there early.

Regular readers of this site know that I'm a big fan of Reps Rosa DeLauro & Jan Schakowsky's "Medicare for America" universal coverage bill, which is scheduled to be officialy re-introduced later on today (with some significant changes from the original version introduced back in December).

However, "Medicare for America" and "Medicare for All" are not the only "major healthcare reform" bills being tossed around DC these days. There's actually eight of them total (technically nine, but two of those are the House & Senate MFA versions, which are nearly identical). Of the eight, only two of them actually guarantee 100% universal healthcare coverage, which is part of the reason #MFA and #Med4Am receive so much attention.

Having said that, I'm also open to considering some of the other proposals on the table. Last month I took a shorter look at the "Medicare X" bill introduced by Sen. Tim Kaine and Michael Bennet, which also included a very quick nod to my own Senator Debbie Stabenow's "Medicare 50+" bill, although hers pretty much just lets people over 50 buy into the current Medicare program.

I'll be writing about the updated Med4Am bill later today, but there's a second major healthcare reform bill being formally rolled out today as well: The "Choose Medicare" bill sponsored by Senators Jeff Merkley of Oregon and Chris Murphy of Connecticut:

America has one health care plan that everyone loves: Medicare. It’s time to give every American the opportunity to choose Medicare, and that’s exactly what this bill does.

Making Medicare Available to Everyone

This bill gives all Americans the choice of buying Medicare as their health insurance plan. Unless an individual is already in Medicaid or traditional Medicare, they will be able to choose Medicare on all State and Federal exchanges, and use Affordable Care Act (ACA) subsidies to help pay for it.

Additionally, employers could choose to select a Medicare Part E plan rather than private insurance to cover their employees. The Part E plan would leverage the existing exchange networks and low administrative costs of the Medicare program, while achieving additional savings by allowing Medicare to negotiate drug prices. The new plan will cover the same benefits as traditional Medicare, as well as additional benefits to meet the needs of the nonelderly.

The “Choose Medicare Act” opens up Medicare to everyone while building on the system we have today. By allowing Medicare to compete with private health insurance, Medicare Part E puts consumers and businesses in the driver’s seat on the road to universal health care.

The Choose Medicare Act:

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.
  • Addresses the discrepancy between consumer protections in the individual and group markets by extending the ACA’s rating requirements to all markets, to end discrimination based on pre-existing conditions once and for all.

Provides Comprehensive Coverage

  • Includes the ACA’s 10 essential health benefits and all items and services covered by Medicare.
  • Provides high-quality, gold-level coverage and cost-sharing.
  • Ensures coverage for all reproductive services including abortion.

There's a lot of hot-button issues surrounding any healthcare policy reform, and one of the most controversial ones is federal coverage of abortion services...aka, repealing the Hyde Amendment. Both #MFA and #Med4Am tackle Hyde head-on, which makes sense since both bills would mandatorily replace current coverage for either half the country or all of it. Choose Medicare wouldn't be mandatory for anyone, which makes it all the more interesting that Merkley & Murphy are still choosing to insist on repealing Hyde (or at least seriously weakening it?) in their bill as well.

In short, the Democratic Party as a whole appears to have decided that it's time for the Hyde Amendment compromise, which has been in place for over 40 years, to come to an end. As I wrote back in February, this is going to be an epic battle royale regardless of whether they ultimately end up going the MFA, Med4Am or ChooseMed route.

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.
  • Directs Medicare to negotiate fair prices for prescription drugs.
  • Drives down private insurance premiums through competition from Medicare by allowing the HHS Secretary to block excessive private insurance rates.
  • Extends traditional Medicare protections on balance billing or surprise bills to Part E plans.

Here's some more details:

Sec. 2201 Public Health Plans

Establishment – The Secretary will establish public health plans that are available in the individual market, small group market, and large group market.

Benefits – Each Medicare Part E plan, regardless of whether the plan is offered in the individual market, small group market, or large group market, will be a qualified health plan and,

  • provide coverage of essential health benefits and all items and services covered by Medicare;
  • cover abortions and all reproductive care;
  • provide gold-level coverage; and
  • meet all other requirements applicable to qualified health plans, other than the requirement to offer silver and gold plans.

Availability on the Exchanges – The Medicare Part E plans offered in the individual and small group markets will be offered through the Federal and State Exchanges, including the Small Business Health Options Program Exchanges (commonly referred to as the ‘SHOP Exchanges’).

Eligibility – Any individual who is a resident of the United States, who is not eligible for Medicaid, CHIP, or traditional Medicare, is eligible to enroll in a Medicare Part E plan offered in the individual market or offered by the individual’s employer. The Secretary shall establish residency requirements.

Employer-Sponsored Plans – The Secretary will provide options for Medicare Part E plans in the small group market and large group market that are voluntary, and available to all employers, effective one year after the date of enactment.

  • At the request of a plan sponsor, the Centers for Medicare and Medicaid may serve as a third party administrator of a group health plan that is a Medicare Part E plan offered by such sponsor.
  • The Secretary will develop a process for allowing individuals enrolled in a Medicare Part E

plan offered in the small group market or large group market to maintain health insurance coverage through such plan if the individual subsequently loses eligibility for enrollment in such plan based on termination of the employment relationship.

Premiums – The Secretary will establish premium rates for the Medicare Part E plans that are adjusted based on—

  • whether the plan is offered in the individual market, small group market, or large group market; and
  • applicable rating area;
  • are at a level sufficient to fully finance the costs of health benefits provided by the plans and administrative costs related to operating the plans; and
  • comply with all rating reform requirements under the ACA, including for plans offered in the large group market.

Providers and Reimbursement Rates – The Secretary will establish a rate schedule for reimbursing health care providers under the Medicare Part E plans by negotiating rates that are not lower, in the aggregate, than Medicare Fee for Service rates, and not higher, in the aggregate, than average rates paid by private plans offered on the exchanges.

Participating Providers – A health care provider that is a participating provider of services or supplier under traditional Medicare will be a participating provider for Medicare Part E plans. The Secretary will also establish a process to allow additional health care providers to become participating providers for Medicare Part E plans.

Limitations on Balance Billing – The limitations on balance billing in traditional Medicare also apply to participating providers in Medicare Part E plans.

Encouraging Use of Alternative Payment Models – The Secretary shall utilize alternative payment models, including those in the Medicare Access and CHIP Reauthorization Act of 2015.

Start Up Funding and Initial Reserves – For purposes of establishing the Medicare Part E plans, $2,000,000,000 is appropriated for fiscal year 2020. The Secretary will also appropriate such sums as may be necessary, based on projected enrollment in the Medicare Part E plans in the first plan year, to provide sufficient reserves for paying claims filed during the first 90-days.

Section 3 – Notice and Navigator Referral for Employees Under the Fair Labor Standards Act of 1938

  • The Fair Labor Standards Act of 1938 is amended by adding the requirement that employers who do not provide health insurance to their employees must refer full time employees at the time of hire to a health care navigator, as defined under the ACA, beginning two years after the date of enactment.
  • The Government Accountability Office will conduct a study of the efficacy of the ACA’s requirement on employers to notify new workers of their health care coverage options.
  • Authorizes such sums as may be necessary to be appropriated to address capacity limitations of entities serving as navigators.

Section 4 – Protecting Against High Out of Pocket Expenditures for Medicare Fee-for- Service Benefits — The annual out-of-pocket limit for seniors enrolled in traditional Medicare will be $6,700 for 2021 and adjusted in subsequent years according to the medical care component of the Consumer Price Index for All Urban Consumers.

This is one of the areas where existing ACA exchange plans are actually better than current traditional Medicare: Right now, traditional Medicare does not have a maximum out-of-pocket (MOOP) limit on expenses, whereas Medicare Advantage (the privately-administered version) does. My guess is that this is one of the main reasons why MA is so popular. ChooseMed would resolve this issue...and it would apparently make that MOOP level considerably lower than the ACA MOOP is today.

Section 5 – Negotiating Fair Prices for Medicare Prescription Drugs — The Secretary is granted the authority to negotiate drug prices under Medicare Part D.

  • If, after a year, the Secretary and drug manufacturers fail to successfully negotiate a fair price, the Secretary will use the price that the Department of Veterans Affairs or other federal agencies that purchase prescription drugs use.
  • The Secretary will prioritize negotiations on specialty and other high-priced drugs.

Section 6 – Enhancement of Premium Assistance Credit

  • The benchmark plan is changed from the applicable second lowest cost silver plan to the applicable second lowest cost gold plan.
  • Eligibility for refundable tax credits for coverage under Qualified Health Plans is increased to allow individuals and families earning up to 600% of the Federal Poverty Level to receive assistance.
  • The household income in regard to the repaying of excess advance credit payments is changed from 400% to 600%.

The upgrade of the benchmark ACA plan from Silver to Gold is a much bigger deal than it may sound at first. As noted in the next section, this amounts to the same thing as significantly upgrading the CSR formula for deductibles/co-pays/etc.

The raising of the ACA subsidy income eligibility threshold from 400% to 600% FPL is also a huge improvement, but still leaves a Subsidy Cliff for those earning more than that. This is admittedly a much smaller portion of the population, but still...the ACA 2.0 bill is actually more generous on this front, since it simply removes the 400% FPL cap altogether.

Section 7 – Enhancement for Reduced Cost SharingCost-sharing reduction payments for low-income individuals are enhanced by increasing the actuarial value of the plan provided to eligible enrollees.

Section 8 – Reinsurance and Affordability Fund – The Secretary will establish a program to enable each State to carry out a reinsurance program or provide assistance to reduce out-of-pocket costs, such as copayments, coinsurance, premiums, or deductibles, and will provide funding of $30 billion for fiscal years 2020 through 2023.

Section 9 – Expanding Rating Rules to Large Group Market – This section expands the individual market rating rules to the large group market.

Section 10 – Protection of Consumers from Excessive, Unjustified, or Unfairly Discriminatory Rates – The Secretary is granted the authority to deny, modify or require consumer rebates for excessive private insurance rates in States where the State insurance commissioner or relevant State regulator does not correct excessive rates.

Section 11 – Sense of Congress on Reproductive Services – This section states 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 further that all restrictions on coverage of reproductive services in the private insurance market should end.

In many ways, the Choose Medicare plan is halfway between the ACA 2.0 suite of bills I've been touting and Medicare for America.

Put another way, it's basically the ACA 2.0 upgrades plus the famous "Public Option" which was dropped at the last minute from the original ACA in 2010.

I'm going to read and write more about the Choose Medicare bill soon, but my initial response is that while I'm pushing for Med4Am since universal coverage is important to me, I'd be reasonably satisfied if something like ChooseMed ended up being the final compromise. Again, it would still be a massive step forward from where we are today.