Verma tells insurers to adopt reforms or face extinction through 'Medicare for All'

Seema Verma
Centers for Medicare & Medicaid Services Administrator Seema Verma warned insurers to shape up or face the consequences of "Medicare for All." (YouTube)

The head of the Centers for Medicare & Medicaid Services (CMS) told a crowd of insurers if they don’t work to increase transparency and reduce patient costs, they will face extinction through "Medicare for All."

CMS Administrator Seema Verma, who spoke Tuesday at industry group America’s Health Insurance Plan’s Medicare conference, called for insurers to reduce administrative complexity on formulary management tools and make it easier for patients to compare prices.

Patients are “frustrated with you,” Verma told the insurers. “They are concerned with care being denied and worried about surprise bills. Today, insurance companies have lowest satisfaction rates among Americans.”

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She added that doctors are also “exasperated by increasing administrative burdens and hassles with prior authorization and reporting. Some feel they spend more time haggling with insurance companies than taking care of their patients.”

“Not surprisingly doctors, like patients, are demanding changes,” Verma said.

RELATED: Harvard researchers: 'Medicare for All' wouldn't overwhelm hospitals

Verma referenced the American Medical Association’s narrow defeat of a proposal to endorse Medicare for All. The association’s delegates defeated an endorsement by a vote of 47% to 53% earlier this summer at the group's annual meeting.

“When physicians who have traditionally opposed more government intrusion in their work consider endorsing government-run healthcare something is terribly wrong,” Verma said.

The close vote should be a “canary in the coal mine” to the insurance industry to adopt major reforms, she added.

Verma quickly pivoted to say insurers need to adopt greater transparency and access to more options to save costs.

“As deductibles continue to rise, patients are demanding more accessible, real-time personalized information to understand their options and pick high-value providers and avoid surprise bills,” she said.

Verma added that major insurers such as UnitedHealth, Aetna and Anthem are already developing “innovative transparency tools.”

RELATED: Experts disagree on 'Medicare for All' costs

Verma has been attacking Medicare for All, a proposal to replace commercial insurance with a government-run system, since it has gained popularity among congressional Democrats and candidates for the Democratic 2020 presidential nomination.

However, Verma has lately taken to using Medicare for All to warn the healthcare industry to adopt reforms. Sept. 10, Verma told a regional board meeting of the American Hospital Association that surprise billing and other problems have led to the newfound prominence of Medicare for All.

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