Today Ends the Medicare Annual Enrollment Period; Does it Begin a New Private Era for Medicare?

As reported widely, including in The New York Times,[1] the Trump Administration spent this Medicare Annual Enrollment Period steering beneficiaries towards private Medicare Advantage (MA) plans. While CMS contests this conclusion, Administrator Verma stated they are “unleashing and strengthening” Medicare Advantage[2] and HHS Secretary Azar says he sees Medicare Advantage as the future of Medicare: "There's a day when we'll have a majority in MA, and it will be the dominant part of the Medicare system.” [3] This is not good news for beneficiaries or Medicare.

Enrollment in a private MA plan, rather than traditional Medicare, is often a disadvantage for people when they get sick or injured and really need coverage and care. They then find their health care options limited by plan networks, prior authorization requirements and restrictive interpretations of coverage rules.[4] While CMS insists competition results in MA plans providing better coverage, a recent article in the New England Journal of Medicine[5] by researchers at the Kaiser Family Foundation, reports that only 10% of beneficiaries switch plans from year-to-year. What the MA plans know is that initial enrollment is the key; market share is what matters. After people enroll in a plan, perhaps based on assertive marketing, they rarely exit, even if coverage doesn’t meet their needs.

Just as importantly, the increasing bias towards Medicare Advantage is fragmenting and privatizing the Medicare program. With little attention, Medicare is changing into a set of private plans, with traditional Medicare as a public option. At the same time, there is increasing talk of using Medicare as the foundation for universal health coverage. Attention must be paid, and action taken, to slow down the privatization train before it’s too late, and before Medicare becomes the basis for universal coverage.

December 7, 2018 – J. Stein