Implementing two of Hillary Clinton’s key healthcare proposals would present slew of potential costs--and benefits--for consumers and the health insurance industry, a new analysis shows.
In a recent piece published in the New England Journal of Medicine, Clinton says that as president, besides upholding and modifying the Affordable Care Act, she would ensure that a public insurance option is offered in every state. Further, she plans to allow Americans buy in to Medicare at age 55.
Clinton’s "Medicare-for-more" proposal could push rising premiums back downward while pulling older, higher-cost members out of Affordable Care Act exchanges, FierceHealthPayer has reported.
On Thursday, the Urban Institute published a policy analysis on the Medicare buy-in as well as a public option. Here are some of the key takeaways:
- The Medicare buy-in could drive down costs for younger enrollees as older adults exit the ACA risk pool.
- If traditional Medicare is an option for people ages 55-64, the lack of out-of-pocket maximums would create demand for Medigap plans, according to the analysis.
- Restricting this age group to buying in to Medicare--and excluding it from buying ACA or Medicare Advantage plans--would correlate with the greatest reduction in marketplace premiums for people younger than 55, according to the report. However, this route limits options for people 55-64 who may want more generous coverage benefits or out-of-pocket maximums.
- Insurers tack on an assessment to marketplace plan premiums to finance administrative costs, the report notes. Fewer older enrollees would make fixed administrative costs harder for private insurers to cover.
- Reducing the number of marketplace consumers--as the Medicare buy-in would--could make exchanges even less attractive for insurers to participate.
- A public option would increase choice in areas where there are only a few payers, or in some cases just one. Thirty-one percent of U.S. counties will feature just one marketplace insurer in 2017, a previous analysis found.
- Opponents of the public option worry that the government's lack of profit motive would crowd private payers out of the market, but according to the report this is not true. Premiums would be determined by Medicare-like payment rates to providers, risk adjustment, administrative costs, and perhaps most significantly, would "require that premiums reflect the development of reserves," leading the Urban Institute to conclude that the public option plan "would not competitively disadvantage private insurers."
- If Clinton gained sufficient congressional and political backing to implement a public option, which she might not even need, the public insurance option would not be the lowest-priced option in every individual market. Private insurers with experience in Medicaid managed care, like Molina Healthcare, would likely still out-compete the public option plan on price, the report says.
Depending on plan design, Clinton’s policies could cut down on the redistribution of healthcare costs, which currently place a heavier burden on younger people, the analysis says. The Obama administration has targeted young people--a key demographic for exchange enrollment--with its new #HealthyAdulting campaign.