Reading Elizabeth Warren’s Healthcare Plan, Part 6

Part 1: Quotes directly from Elizabeth Warren’s official website about her healthcare plan, from which I am drawing all of my information for subsequent posts

Part 2: Reviewing her plans for dealing with pharmaceutical prices

Part 3: How she will “improve the ACA” to get her transition to M4A started

Part 4: All the other things she’ll do before starting the transition to M4A, including some Medicaid changes, increasing access for rural and underserved patients, making antitrust enforcement stricter, and a variety of other incremental changes

Combine all the details from parts 2, 3, and 4, and you have the most likely scenario of how the healthcare system will end up with a Warren administration!

Part 5: How she will transition to M4A, which is mainly by lowering Medicare eligibility to age 50 and then offering a Medicare “public option” for people ages 0-49 that pretty much anyone can opt into

I categorized everything Elizabeth Warren has written on her website (at least as of late 2019 when I read through it all) about healthcare into the following groups:

  1. General details that will apply regardless of how close she gets to achieving Medicare for All (M4A)
  2. Her plan to transition to M4A
  3. Her vision of what M4A would look like if it is achieved

Last post, we talked about number 2. So now let’s look at number 3: Elizabeth Warren’s vision for the future American healthcare system, which she plans to achieve by the end of her first term in office.

First, we’re already clear that she plans on covering everyone with a single publicly run health insurance company we lovingly refer to as Medicare. What would this coverage include? Everything Medicare already covers, plus more mental health and substance use services, contraceptives, vision, expanded dental coverage, audiology, physical therapy, and long-term care. So, very comprehensive.

How much would Medicare enrollees pay? Initially, there would be premiums of unspecified amounts, and everyone would have an annual out-of-pocket max of $1,500 (the premiums you pay don’t apply to that $1,500), but that’s all-inclusive of parts A, B, and D. Over time, all premiums, copays, and deductibles would be phased down to $0. She doesn’t specifically mention coinsurance, but I think she intends to get rid of all out-of-pocket costs completely.

How will she pay providers? She says initially they will get 110% of current Medicare prices, which is higher than 100% because presumably she has to make up for the fact that they will no longer be getting payments from private insurers, which tend to be higher than what Medicare pays. And then she says something I find interesting. Some hospitals will initially get more than 110% (rural hospitals, teaching hospitals, and the ambiguous “others with challenging cost structures”), and some will get less than 110% (those hospitals that are “doing fine with current Medicare rates”). I guess she wants to directly control profitability–hospitals that make more money will get paid lower prices!

The “geographic base rate adjustments”–a multiplier that adjusts prices up or down depending on the cost of doing business in that region–will remain in place, which makes perfect sense.

She doesn’t want to pay providers 110% forever. Over time, she will decrease that number as providers adjust their administrative staff down to adjust to the new simplified life of only dealing with one insurer. But she also says these decreases will be provider specific according to the “overall plan size and the progress of provider adjustments to new, lower rates.” Again, there’s a lot of administrative latitude going into setting provider-specific prices.

She’ll also start paying primary care doctors more and will decrease pay for “overpaid specialists.”

But what if all of this isn’t enough to reign in runaway healthcare spending? What will she do then? She will enforce further global rate reductions, plain and simple.

Elizabeth Warren also makes a point to explain how employers fit into all of this. Since they no longer have to pay for private insurance for their employees, they will be expected to pay Medicare directly for covering their employees. She doesn’t mention whether this requirement will go away once all premiums are phased to $0, but I find it unlikely that she would willingly give up such a reliable stream of income. Regardless, this requirement would not apply to businesses with fewer than 50 employees, and it would slowly phase in as the number of employees increases. Self-employed folk don’t have to pay the Medicare premium either unless they exceed a certain amount of income. And if any employer out there that gets a killer deal on healthcare insurance from a private company, they can go ahead and use that private company as long as they pass on whatever savings they are getting directly to their employees.

There you have it. A M4A system in the United States. I’ll save my assessment and recommendations for next time.

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