Medicare’s Market-Based Success
Updated: Nov 19, 2020
It’s open season.
This doesn’t refer to deer or duck hunting season. Nor to Christmas sales or Christmas movie marathon season. Nor to this college football season, where overrated teams from prissy conferences perversely occupied real estate in the rankings despite not playing for months.
Nor even does it refer to an election season for taking back congressional seats that fell in the blip of 2018 to “moderates” who quickly showed they were lying. And it sure doesn’t refer to the infestation of domestic enemies — “protestors,” anarchists, socialists, antipolice and “woke” Jacobins.
It’s open season for Americans to select health coverage for next year.
Working stiffs either go through their employer or are forced into the Obamacare funnel. The “exchange” makes this process more complicated, more bureaucratic and unnecessarily burdensome than pre-Obamacare private-sector options for shopping for a health plan.
Until the Trump administration and a GOP Congress relaxed some of the red tape and expanded health insurance options, premiums skyrocketed each year for Obama-Biden government-dictated plans. And the coverage and benefits got crummier and crummier.
That’s the reality of Obamacare. A Biden administration plans to bring back this nightmare. It will add a range of government-controlled elements, such as price controls and monopsony strong-arming.
However, Medicare beneficiaries today have real choices for coverage. Even Obamacare’s power grab of a big chunk of America’s health system largely kept consumer choice and plan competition intact in Medicare.
President George W. Bush and bipartisan supporters in Congress made that possible through the 2003 Medicare Modernization Act. MMA created Part C, or Medicare Advantage, and Part D drug coverage.
MMA intentionally designed Parts C and D to foster private plans’ competition and give seniors private plan choices in Medicare. These programs have expanded seniors’ options beyond one-size-fits-all Medicare, Parts A and B.
Original, fee-for-service Medicare remains rigidly micromanaged by federal bureaucrats. Complex rules and regulations, fee schedules and coverage decisions result in hospital and physician benefits that fall short of beneficiaries’ needs. Seniors in conventional Medicare typically buy supplemental insurance (AARP’s bread and butter).
Market-based choice and competition work. Medicare Advantage (or MA), where private health plans compete for seniors’ selection, and Part D prescription drug plans enjoy very strong satisfaction ratings.
An extraordinary 99 percent of MA enrollees are satisfied with the care quality their plan provides. It’s easy to understand why. MA plans coordinate care, offer benefits like dental, vision and telehealth, and save seniors about $1,600 over what FFS Medicare costs seniors.
The latest Morning Consult survey found 92 percent of beneficiaries report being satisfied with their Medicare drug plan; 87 percent regard their Rx benefits as delivering good value. Also, 84 percent consider their premiums affordable, while 81 percent believe their out-of-pocket prescription costs are reasonable.
MA is the Medicare option of choice for more and more beneficiaries. Part D and MA together serve 42 million, or almost three-quarters of the Medicare population. Some 27 million seniors, 42 percent of the Medicare population, have enrolled in MA plans.
Medicare drug premiums have remained stable, while MA premiums in 2021, at $21 a month, will be as low as 2007.
Making lemons out of lemonade, the New York Times recently spun the fact that many Medicare beneficiaries don’t do deep-dive MA or Part D plan comparisons. The screed asserted the not-subtle point that this is somehow bad.
Hey, Big Apple Einstein, we’re talking satisfaction rates in the 80s and 90s! Common sense leads one to expect satisfied consumers not to do much shopping around for an alternative.
Open season for Medicare Advantage and Part D is pretty calm because the competitive, market-based parts of Medicare are performing as designed. Hopefully, big-government zealots won’t ruin it.