Part 1 reviewed Title 1, which states that basically everyone will be covered and can receive care from pretty much any provider. Part 2 reviewed Title 2, which states that insurance benefits will be comprehensive without any regular out-of-pocket expenditures. Part 3 reviewed Titles 3 and 4, which lay down some provider standards and also some expectations regarding data reporting. Part 4 reviewed Titles 5 and 6, which establish some quality standards and a national health budget, plus it gives an updated process for how fee schedules will be made. Part 5 reviewed Titles 7, 8, and 9, which are primarily nuts and bolts of where tax money will be placed, some clarifying statements, and a lot of conforming amendments.
Let’s look at the last two titles of this bill today.
Title 10
Title 10 is a huge chunk of this act. It describes how we’ll get from here (current healthcare system) to there (M4A). I’m more interested in the description of the final destination titles 1-9 have given rather than how we get there. After all, the transition time, no matter how it’s managed, will be disruptive and time-limited, and then it will be over. This doesn’t mean I want to completely ignore it. But it does mean I will not get mired down in all the details.
There are 3 subtitles that make up Title 10:
- Subtitle A lowers the Medicare age and establishes a “Medicare Transition Plan.”
- Subtitle B makes a number of reforms to Medicare to get us closer to the end goal, such as decreasing out-of-pocket limits for Parts A, B, and D, and eliminating Parts A and B deductibles, plus adding dental, vision, and hearing aid coverage to Part B.
- Subtitle C provides some protections to maintain continuity of care during this transition time.
Subtitle A is the meat of the transition plan, so let’s talk about that just a little more.
First, it creates what I will call a “young Medicare” plan. The ages of eligibility are phased in over a few years, but it’s lowering the age of Medicare to 35. Coverage and cost sharing requirements are the same, but the premium is calculated differently for this young Medicare group from 35 to 64 years old. Enrollees will pay a monthly premium of 1/12 of “the average, annual per capita amount for benefits and administrative expenses.” So, from how this reads, everyone in this young Medicare plan is lumped into the same risk pool, and they all pay the average expected cost. This means there are no age rating bands.
Since there will still be private insurers offering all their plans for the under-65 crowd, this is essentially a public option. It will be offered on the insurance exchanges alongside private insurance plans, and it will be eligible for cost-sharing subsidies just like any other plan on the exchanges. And based on the lack of age rating bands, it will probably be an amazing deal for the 64-year-olds and a bad deal for the 35-year-olds. This is a situation ripe for a “death spiral,” but that won’t matter too much because this is a time-limited thing anyway.
Next, Subtitle A creates a “Medicare transition plan.” This is a health insurance plan that is also a public option like young Medicare, but it’s more ACA style. It will be sold on the exchanges, and it will adhere to all the requirements that other plans sold on the exchanges follow: anyone can enroll, premiums will be determined by age and tobacco status, and premium assistance and cost-sharing subsidies will all apply. The huge advantage this plan has over private plans being sold on the exchanges is that it piggybacks off the Medicare network of providers and Medicare fee schedule, so I expect it will be a market killer as long as premiums are competitive (and they should be based on how much lower their provider rates will be).
With the combination of lowering the Medicare age substantially and also adding an ACA-style public option that will take a large share of the market, most people will end up on public health insurance of some form.
Title 11
This simply updates the resource limits for Supplemental Social Security Income eligibility and then provides a few definitions.
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There we have it! Reading a healthcare bill can be pretty dry stuff, but now we have all the important details and can start looking at this bill as a whole to give some final evaluative and prescriptive commentary.
Continue to Part 7 (Conclusion).
Clear Thinking on Healthcare 