We concluded our first post with a set of key principles to restructure the current insurance system in the US toward universal coverage. We firmly believe that one non-negotiable from that list is that everyone should obtain coverage from the same system, with the same set of insurance options. What we currently have in the US can be best characterized as a patchwork, with US federal employees and members of Congress in their own program, the Federal Employee Health Benefit Program (FEHBP), and the rest of us in some combination of the following: no insurance, or Tricare (FEHBP-like for military dependents), or Medicaid, or SCHIP, or Medicare, or employer based 1-3 options of private insurance, or have to go to the single market and hope to find something.
Moreover, the structure of the US private-public system, with mostly private insurance coverage under the age of 65 and with Medicare coverage after 65, is fundamentally a flawed design. Many developed nations with universal healthcare coverage, including Canada and the UK, have mixed public-private systems that function in parallel. In contrast, the US system is set up “in series,” with private payers covering the younger and healthier working population, while the government picks up the tab for the elderly, the disabled, and the disadvantaged. Under this arrangement, private insurers have few incentives to focus on prevention and health promotion, since most of the financial risk for managing chronic conditions is basically passed on by them to Medicare. Thus, the sickest (and most expensive) patients become the federal government’s (read tax-payer’s) problem.
So, what might a good universal coverage plan actually look like? It would be a national exchange of private insurance options, with a non-governmental public oversight board, government means-tested premium support, and lots of choices (catastrophic, HMO, PPO, etc). It would be, or mirror, the FEHBP. After all, as a Robert Moffit quote in Putting Medicare Consumers in Charge: Lessons from the FEHBP highlights, “What is good enough for Congress should be good enough for the American people.”
And how might we get there from here? A potential sequence of steps (with special consideration given to the Medicare program) is described below:
- Announce a date on which the new FEHBP-like insurance model will start.
- Everyone not currently on Medicare (e.g., with employer-based, Medicaid, SCHIP, etc insurance) will be enrolled in the FEHBP-like model with government support when the switch is made.
- Announce a date when Medicare will no longer enroll new members.
- Give everyone currently enrolled in Medicare, a one-time option to grandfather and remain in Medicare, otherwise they must select to move into the new model.
- Ensure that all new Medicare enrollees would be eligible only for the new FEHBP-like program.
While this sounds relatively straightforward, since the model we are proposing already exists within the confines of the current US healthcare system, doing the right thing legislatively will require a profound mind-shift across our political establishment. It will require true leadership from both sides of the isle (if history has taught us anything, it is that major social policy change requires the backing of both parties) and a clear overarching vision that puts the patients (i.e., all of us, since sooner or later we all become patients) at the center.
Some might wonder why go with FEHBP-for-all and not Medicare-for-all and we’ll address that question in detail in our next post, but here are some questions our readers might want to contemplate in the meantime:
- Who is the board of directors for Medicare? What are the implications for development and dissemination of new models of care?
- Why does the majority of traditional (fee-for-service) Medicare beneficiaries carry supplemental health insurance coverage?
- What percent of Medicare spending is tied to quality measures and clinical practice improvement?