The role of Private insurance in Medicare for All legislation
I have written before an article explaining why Medicare for All, makes sense. You can read it here.
This article is to bring some light into two good implementations of the Medicare for All idea. Before we start, a few definitions first:
I will be referring to H.R.1384 — Medicare for All Act of 2019 House Bill
I will be referring to S.1129 — Medicare for All Act of 2019 Senate Bill.
First let us focus on the common areas:
- Both provide universal coverage (HR 1384 sec 102, S 1129 sec 102).
- Both have prohibition against duplicate coverage (HR 1384 sec 107, S 1129 sec 107).
- Healthcare provider participation is an opt-in process (HR 1384 sec 301.a.2, S 1129 sec 301.a.2). Let this be clear. Healthcare providers need to file a participation agreement for both bills. Otherwise their services are NOT covered under either Act.
The primary difference between HR 1384 and S 1129 is the definition in the use private contracts.
HR 1384 prohibits any contracts between patient and health care provider if it is covered under the Act. This is the strongest implementation of preventing duplicate coverage. In other words, Doctors cannot selectively define procedures covered under the Act to not be covered.
S 1129 allows for contracts between patient and provider as long as the provider receives no claim of payment, no reimbursement under the Act, and no payment from another organization benefiting of this Act. This means that Doctors CAN selectively define procedures to be NOT covered under the Act.
Both Bills provide very similar coverage:
(1) Hospital services, including inpatient and outpatient hospital care, including 24-hour-a-day emergency services and inpatient prescription drugs.
(2) Ambulatory patient services.
(3) Primary and preventive services, including chronic disease management.
(4) Prescription drugs, medical devices, biological products, including outpatient prescription drugs, medical devices, and biological products.
(5) Mental health and substance abuse treatment services, including inpatient care.
(6) Laboratory and diagnostic services.
(7) Comprehensive reproductive, maternity, and newborn care.
(8) Pediatrics, including early and periodic screening, diagnostic, and treatment services.
(9) Oral health, audiology, and vision services.
(10) Short-term rehabilitative and habilitative services and devices.
(11) Emergency services and transportation.
(12) Necessary transportation to receive health care services for individuals with disabilities and low-income individuals.
(13) Home and community-based long-term services
What is not covered by either bill?
- Most non-life threatening counseling (e.g. Marriage counseling)
- Cosmetic Surgery and Orthodontics
- Hospital upgrades (e.g. private rooms)
This means private health insurance can co-exist with single payer. It is technically NOT supplemental insurance, in the sense that IF the patient wants to see a healthcare provided who has not OPTED IN Medicare for All, the insurance doesn’t SUPPLEMENT any payments.
It is also NOT a replacement for universal coverage because of the duplicate coverage prohibition. A doctor performing covered services CANNOT accept payment from both MEDICARE and a PRIVATE INSURANCE company.
The private insurance companies have been so detrimental to the healthcare industry, that it is understandable why so many people would love these companies to disappear altogether.
At the end, at what extent private insurance remains viable, depends on the number of healthcare providers who OPT-IN Medicare for All.This will greatly depend in the payout rates Medicare for All offers to healthcare providers.
Why does this work? and how is this different than a “public option”?
A public option would mean that Doctors can accept different types of insurance, a public and private one for the same service. This can cause private insurance companies to enrich themselves with healthy patients, and then throw the less healthy patients (and more expensive to serve) to the public option. Thus socializing risk, but privatizing profits.
But since Doctors will have to choose between participating in Medicare or not, private companies cannot offer the same service to healthier individuals at a seemingly lower cost, they can only ADD new services and providers NOT COVERED under Medicare.
Now let us look at a few examples:
a) Your Doctor participates in Medicare for All, and you undergo a covered service.
This is the default and easy case, you benefit 100% by the legislation
b) You love your doctor, you live in an upper-class neighborhood, and your doctor refuses to participate in Medicare for the treatment you need. This leaves you with three options:
- You can change doctors, to another doctor that takes Medicare (at no extra cost to you).
- You can pay your doctor directly (assuming you can afford it)
- You can get private insurance covering your doctor, as any other private insurance in the market.
Assuming the Senate version of Medicare for All passes, because the Doctor can opt-in selectively different services it provides, it can lead to a dual path for service, those who have private insurance, and those who do not.
This is not the case for the House version because the Doctor cannot selectively opt-in for certain services, If he provides those services in his practice, and they are covered by Medicare for All, they have to take it.
c) You currently have a healthcare insurance that covers alternative medicine.
Because alternative medicine (acupuncture, chiropractics, homeopathy) is not covered under Medicare, you either need to:
- Pay your doctor directly (assuming you can afford it)
- Get private insurance covering your doctor, as any other private insurance in the market.
However, because now you are only paying for a fraction of the services, you will likely see a reduction in the premiums of your healthcare insurance bill.
These two bills support these two mechanisms:
- Universal coverage for all healthcare providers taking Medicare for All.
- Allow for the existence of private insurance even for covered procedures AS LONG AS THE healthcare provider does not participate in Medicare for All.
There is no infringement on the law, and both bills give people options for their care, while reducing the cost of providing service to all Americans. And as previously stated the House bill prevents a dual-service path, compared to the Senate bill.