New 'Medicare Extra' plan would carve out role for private health insurers

Health insurance, pen and stethoscope
A newly proposed plan to expand health insurance coverage would build on Medicare but also keep an element of privatization. (Getty/Minerva Studio)

A left-leaning think tank is proposing a plan for universal health coverage that sounds similar to “Medicare-for-all” but is actually friendlier to private insurers.

The Center for American Progress released the plan, called “Medicare Extra for All,” on Thursday, saying the protracted battle over the Affordable Care Act shows that the country is in favor of expanding coverage instead of rolling it back.

“Medicare Extra would take the next step by guaranteeing the right of all Americans to enroll in the same high-quality health care plan,” CAP President and CEO Neera Tanden said in a statement.

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Like Sen. Bernie Sanders’ “Medicare-for-all” proposal, the CAP plan would use Medicare as a basis for expanding coverage to a wider swath of Americans than those who currently qualify for the public insurance program.

Not only would everyone be able to qualify for Medicare—regardless of income, health status, age, or insurance status—but the program would be enhanced with features like out-of-pocket limits, low or no deductibles and integrated drug benefits. Premiums would also be capped based on income.

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However, unlike in a true single-payer system, the proposal would let employees choose between keeping their current employer-based coverage or switching to a Medicare Extra plan sponsored by their employer.

In addition, CAP’s proposed system would preserve consumers’ right to choose privatized Medicare coverage—an increasingly popular option among seniors and a booming business for insurers. Still, it would recast the Medicare Advantage program as “Medicare Choice,” using the new system’s bargaining power to solicit bids from plans and capping plan payments at 95% of the Medicare Extra premium.

The plan’s treatment of Medicare Advantage and employer-sponsored insurance would give private insurers a role to play in the system that CAP envisions, which could help garner the support of an industry that has not been receptive to single-payer proposals.

CAP’s proposal would also integrate Medicaid and the Children’s Health Insurance Program into the Medicare Extra program, and the overall program would set payment rates for medical providers based on current Medicare rates.

The group said the program would be financed by a combination of healthcare savings—from initiatives like negotiating drug prices and payment and delivery system reform—and tax revenue options such as “increasing healthcare taxes and curtailing healthcare tax breaks.”