Trump’s executive order strengthens Medicare in face of ‘Medicare-for-All’ threat

Trump’s executive order strengthens Medicare in face of ‘Medicare-for-All’ threat

Earlier this month, President Trump signed an executive order designed to defend Medicare against the threat of “Medicare-for-all.” Speaking to a crowd in The Villages, Florida, the president promised that his order would “strengthen, protect, and defend Medicare for all of our senior citizens.”

This order couldn’t come at a better time. As Democratic presidential candidate Sen. Elizabeth Warren rises in the polls, “Medicare-for-all” is becoming the Democratic Party’s official stance on healthcare reform.

But “Medicare-for-all” would end Medicare as we know it and make it harder for seniors to get care. President Trump’s order, by contrast, would improve the program for those who need it most.

The executive order lays bare what “Medicare-for-all” would mean for seniors. By enrolling everyone in the same government-run insurance plan, “Medicare-for-all” would destroy traditional Medicare. Seniors would lose the privileged place they currently occupy in the healthcare system. As the order states, this is unfair to those who have contributed to Medicare “throughout their lives” and expect to receive quality health benefits in old age.

By contrast, the president proposes strengthening the program, particularly by shoring up Medicare Advantage. Private insurers administer these plans, which combine the hospital and doctor benefits covered by Medicare Parts A and B. Many Advantage plans also include prescription drug coverage.

Medicare Advantage enrollment has nearly doubled over the past decade. One-third of all Medicare beneficiaries are covered by Advantage plans this year. The Congressional Budget Office predicts that nearly half of all Medicare enrollees will be in these plans by 2029.

Medicare Advantage is popular because it delivers high-quality care at low cost to beneficiaries. There are several reasons for this. Every year, the government determines what it will pay to cover Medicare Advantage enrollees in a given area. Insurers who provide coverage for less than that amount get back the difference in the form of a government rebate. Insurers also get bonus payments for receiving high-quality ratings.

As a result, insurers are incentivized to keep beneficiaries happy. They do so not just by keeping a lid on costs for enrollees but by offering benefits not covered by traditional Medicare. Nearly 70 percent of Medicare Advantage plans provide dental benefits; close to 80 percent include vision care. Over 70 percent offer some type of fitness benefit.

The president’s executive order would further empower Medicare Advantage plans to provide top-tier benefits to seniors. For instance, the plan directs the Secretary of Health and Human Services to find ways that plans can incorporate telemedicine — that is, care delivered remotely with the help of technology.

That’s great news. Telemedicine can give seniors access to far-away specialists they wouldn’t otherwise be able to see. It can also allow seniors to receive care from the comfort of their own homes.

And telemedicine is proven to improve patient health while containing costs. One Maryland hospital’s telemedicine program reduced hospitalizations for chronic disease patients by 90 percent; it’s cut the cost of care for these patients in half since 2016.

Traditional Medicare beneficiaries would also benefit from the Trump executive order. An entire section is devoted to reducing regulations so doctors can spend more time with patients. Right now, nearly one-third of doctors spend just 15 minutes with each patient they see, in large part because they have to spend so much time on paperwork and administrative tasks to comply with Medicare’s rules. Slashing red tape will allow doctors to focus on actually delivering care.

The executive order also contains a variety of provisions designed to increase competition in Medicare. One section directs various federal agencies to research how to “inject market pricing” into traditional Medicare so that prices throughout the benefit would “more closely reflect the prices” paid in Medicare Advantage. Elsewhere, the order calls for rules that would provide beneficiaries with price and quality information to help them shop for the best-value plans and providers.

Taken together, these provisions could make traditional Medicare look a lot more like Medicare Advantage. That’s good news for beneficiaries — average Medicare Advantage premiums have been declining since 2015, dropping to just $29 a month this year.

Protecting Medicare for seniors will require more competition, not more government control. Kudos to President Trump for realizing that the future of this program lies with Medicare Advantage, not “Medicare-for-all.”

Read More

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.