Medicare Advantage

Featured Story September 17, 2007

Clinton Details Proposed Changes in Medicare Advantage; Obama and Edwards Are Less Specific

Reprinted from MEDICARE ADVANTAGE NEWS, biweekly news and analysis on the Medicare (and Medicaid) managed care programs.

Few of the major 2008 U.S. presidential candidates have yet taken specific positions on the Medicare Advantage (MA) program. Among ones who at least have touched the periphery of the subject, there seems general support for private health care plans, and there are varying suggestions for getting them to work better.

Sen. Hillary Clinton (D-N.Y.), addresses Medicare managed care most directly and most thoroughly in her public comments on health care reform. Clinton's new health care plans contain powerful echoes of her unsuccessful 1990s reform effort, including insurance purchasing pools.

Part of her stated plan for improving quality and lowering costs is a requirement that "all insurers participating in a federal health program like Medicare or Medicaid or the Federal Employees Health Benefits Program (FEHBP) cover prevention as a condition of doing business with the federal government." Plans would have to "encourage individuals and providers to use prevention services by paying for benefits like cancer screenings and immunizations" through mechanisms including reduced copayments for those services, the menu of which would be based on recommendations from the U.S. Prevention Services Task Force.

Also, "Americans with costly, hard-to-manage illnesses would have access to state-of-the-art chronic care coordination models under federally funded plans," Clinton says. That would permit private HMOs, multi-specialty clinics and provider-sponsored organizations to bid on and provide care coordination, drug management, diet and exercise control and individual patient responsibility promotion programs.

Perhaps most ominously, Clinton says that "we have to crack down on the overpayments in Medicare to private plans. Those plan payment rates are around 12% higher than Medicare traditionally pays to treat the same beneficiaries. Reducing those overpayments could save Medicare $10 billion to $20 billion.a year."

Obama Seeks New National Health Plan

Sen. Barack Obama (D-Ill.), also a universal health care backer, is less specific about Medicare and Medicaid managed care. He said in May, though, that "it's time to let the drug and insurance industries know that while they'll get a seat at the table, they don't get to buy every chair."

Obama would create a new national health plan for individuals without insurance with benefits similar to those available to members of Congress, and he'd expand eligibility for Medicaid and the State Children's Health Insurance Program (SCHIP). The Obama plan would leave states in charge of Medicaid programs, but would require that providers in the new public health plan, Medicare or FEHBP "utilize proven disease management programs." Also, "providers who see patients enrolled in the new public plan, the National Health Insurance Exchange [a public watchdog entity he'd create], Medicare and FEHBP would be rewarded for achieving performance thresholds on outcome measures."

The Medicare managed care-specific tea leaves are harder to read in the health reform plans from former Sen. John Edwards (D-N.C.), but it's clear he's a universal health care backer — and he's the only major candidate so far to mention a single-payer program. His basic proposal is similar to Clinton's, relying on purchasing pools in addition to expansion of some existing federal and state programs, including Medicaid and SCHIP, which he'd fund to cover all adults under the federal poverty level and all children and parents under 250% of it.

The Edwards plan's nonprofit Health Care Markets — his name for purchasing pools — would offer competing plans, including "a public insurance plan modeled after Medicare, but separate and apart from it." They'd be available to everyone who doesn't have employer-based coverage or qualify for a government program. As people choose the plan they prefer, he says, "this American solution would reward the sector that offers the best care at the best price. Over time, the system may evolve toward a single-payer approach if individuals and businesses prefer the public plan." In one specific remark on Medicare, Edwards says it and the Health Care Markets would "pay higher rates to plans and providers that provide the best care, lowering premiums for high-quality plans and penalizing plans that fail to meet critical, easily quantifiable goals such as childhood immunization rates."

On the Republican side, former Massachusetts Gov. Mitt Romney's recently unveiled health reform plans call for "expanding and deregulating the private health insurance market rather than deconstructing the system we have today or replacing it with a government-run system." He says he'd "end subsidized care for free riders by redirecting existing federal and state resources to help the low-income uninsured purchase their own private health insurance."

One of former New York Mayor Rudy Giuliani's "12 Commitments" is to "give Americans more control over and access to health care with affordable and portable free-market solutions," including an income exclusion of up to $15,000 for people without employer coverage to make insurance more affordable.

The other major candidate, Sen. John McCain (R-Ariz.), and the other major soon-to-be-candidate, former Sen. Fred Thompson (R-Tenn.), haven't discussed Medicare health plans in their public comments on health reform.

Visit www.hillaryclinton.com, www.barackobama.com, www.johnedwards.com, www.mittromney.com, www.joinrudy2008.com, www.johnmccain.com and www.imwithfred.com.

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