By NextBestFitFold Medicare Advantage into the public program
End private Medicare plans; enrollees move to the universal public plan.
Draft decision:ChosenPhase 2: Wave 1: seniors, near-seniors, and childrenConfidence: medium · not yet reviewed
Medicare joins the public program in wave one; extra benefits move into the public plan.
To review: MA enrollees lose plans they chose; check dental/vision/hearing are added first.
Review ledgerHow this path connects
This path
Fold Medicare Advantage into the public program
Requires:
Single public payer for everyoneTens of millions of people have no coverageChosenConcrete changes if chosen
What would actually have to change in law, agencies, payment rules, or systems.
- Stop new Medicare Advantage enrollment
- Move enrollees into the public plan on a fixed date
- Add dental, vision, hearing to the public plan
Effects
Each effect has its own page: the evidence, the case that it is or isn't a real cost, and whom it affects.
What it fixes
- Medicare Advantage overpayments and coding intensity
Moving private Medicare enrollees into a universal public plan ends coding-intensity overpayments and applies the same rules across coverage.
What it creates or worsens
- Dental, vision, and hearing are mostly uncovered
Enrollees lose extra benefits, including gym and dental benefits, unless the public plan adds them.
- Reduces income or business for affected groups
Ending private Medicare plans causes large insurer losses.
- Losing the choice of health plan and insurer competition
Ending private Medicare plans moves enrollees into the universal public plan and removes their private-plan options.
8 paths soften this
Hold the single payer to service standardsLosing the choice of health plan and insurer competitionChosenPrivate supplemental plans for extrasLosing the choice of health plan and insurer competitionChosenLet people choose among public care organizationsLosing the choice of health plan and insurer competitionChosenRegulated multi-payer: everyone must have a non-profit or tightly regulated planTens of millions of people have no coverageRejectedIncome-based premiums in a multi-payer systemPremiums are a large, flat, hidden tax on wagesRejectedFix Medicare Advantage paymentsMedicare Advantage overpayments and coding intensityChosenTighter medical-loss ratios and non-profit requirementInsurer overhead and profitRejectedStandardize across many payersAbout $1 trillion a year in administrative costChosen
Who's affected
Who gains
- Taxpayers and public budgets
- Medicare Advantage overpayments and coding intensity: Aggressive diagnosis coding raises payments to private Medicare plans.
- Medicare beneficiaries
- Medicare Advantage overpayments and coding intensity: Overpayments increase their premiums.
- Health insurers, brokers, and their shareholders
- Dental, vision, and hearing are mostly uncovered: Private Medicare plans market extra benefits missing from traditional coverage.
- Cash-pay and private care practices
- Dental, vision, and hearing are mostly uncovered: Coverage gaps support cash-pay care.
Who loses
- Health insurers, brokers, and their shareholders
- Medicare Advantage overpayments and coding intensity: Plans receive larger payments when enrollees look sicker on paper.
- Health administration and software vendors
- Medicare Advantage overpayments and coding intensity: They provide risk-adjustment and coding services rewarded by larger payments.
- Older adults
- Dental, vision, and hearing are mostly uncovered: Coverage gaps and costs lead them to skip dental and other excluded care.
- Low- and middle-income households
- Dental, vision, and hearing are mostly uncovered: Coverage gaps and costs lead them to skip dental and other excluded care.
- People with employer coverage
- Losing the choice of health plan and insurer competition: They can't keep or pick a plan they like, or switch if service is poor.
Other ways to soften the losses
- Add dental, vision, hearing to the public plan
Where it has been tried
- Traditional Medicare: Covers about half of beneficiaries without private plans.
- United States: For 2024, MedPAC estimated Medicare Advantage spending would be $83 billion higher than spending for similar beneficiaries in traditional Medicare.Sources: KFF (2024)