HowMedicare Advantage program is breaking records

Medicare Advantage, a program of competing private health plans forMedicare beneficiaries, is breaking records for enrollment, health plan choice and competition, and cost savings for America’s senior and disabled citizens. Naturally, self-styled congressional “progressives” intend to abolish it.

Created in 2003, theMedicareAdvantagewas designed as an alternative to the traditionalMedicare program. MA’s private health plans offer comprehensive health benefits, including vision and hearing services, aswell as affordable drug coverage and protection fromthe financial devastation of catastrophic illness.

TraditionalMedicare, by contrast, has crucial gaps in coverage for medical benefits and services, notably the absence of catastrophic protection and prescription drug coverage. Seniors enrolled in traditionalMedicare must therefore buy added coverage to secure these vital benefits.

Benefits and services in traditional Medicare andMAare financed very differently. TraditionalMedicare uses a 1960s-style defined-benefit program where physicians and other medical professionals are paid on a fee-for service basis and subject to government price controls.

MedicareAdvantage is financed on a defined-contribution basis, making a per capita contribution on behalf of beneficiaries to the health plan of their choice. Consumer choice and private health plan competition drive the program.

MedicareAdvantage plans also receive help fromthe government’s flexible regulatory regime. This enables the plans to vary their benefit offerings in response to Medicare beneficiaries’ changingwants and needs.

MedicareAdvantage is succeedingwell beyond official expectations. Though MAhas been steadily improving since its start in 2003, theTrump administration’s management of the program, focused laser-like on regulatory flexibility, has not only expanded seniors’ health plan choices and health benefit options, it has also controlled seniors’ costs.

Seniors are voting with their feet. Today, MedicareAdvantage enrolls more than 24 millionMedicare beneficiaries, or more than one third of the totalMedicare population. For 2021, the Center forMedicare andMedicaid Services projects that 26.9 million beneficiaries will enroll in the program, or about42% of allMedicare beneficiaries. Since 2017, whentheTrump administration took over programmanagement, there has been a44% increase inMA enrollment.

At the same time, seniors’ health plan choices will sharply increase in 2021. Today, senior and disabled citizens can choose on average from39 private health plans; next year they will be able to choose froman estimated 47 health plans, includingnewplans in the nation’s rural counties.

As originally designed, MAplans’ varied benefit packages have always been more comprehensive than traditionalMedicare’s defined benefits offerings for hospitalization, physicians and outpatient medical services.

For 2021, however, MA’s benefit offerings are going to be even richer andmore varied. According toCMS, 94% ofMA planswill offer telehealth benefits, reflecting theTrumpadministration’s commitment to expand these benefits during the pandemic.

Beyond that, moreMAplans will offer palliative and hospice care, aswell as a range of supplemental benefits, particularly for the chronically ill, including adult day care, caregiver support and transportation services.

Based on 2020 data, CMSreports continuing improvements in health plans’ quality metrics, particularly forMAplans that offer prescription drug coverage.

Rising health care costs, especially premiums and deductibles, are a major concern for all Americans, but especially retired citizenswhoare living on fixed incomes. Next year, theCMSalso reports that seniors enrolled in theMedicare Advantage programcan expect an 11% decrease in their average monthly health plan premium, and most do not pay any MApremium at all beyond the standard PartBpremium required by allMedicare enrollees.

Since 2017, when theTrumpadministration undertook management of the program, averageMApremiums decreased by an estimated 34.2%. Over the same period, Medicare beneficiaries have saved an estimated $3.4 billion in total premium costs for theirMedicareAdvantage and PartDdrug coverage.

One might think that such a major health policy successwould beworthy of widespread celebration.

Noway.

Instead of celebration, congressional “progressives” response toMA’s success is its destruction. MostHouseDemocrats, along with senior Senate Democrats (including Cory Booker ofNewJersey, Richard Blumenthal of Connecticut and vice presidential candidate KamalaHarris) are sponsoring legislation thatwould abolish theMedicareAdvantage plans, aswell as virtually all other private and employment-based health plans. The Senate bill would create a government monopoly over health insurance and theHouse billwould give federal officials almost total control over Americans’ health care.

If they succeed, youwould no longer have to concern yourself with your personal choice about the best health plan for you and your family. That will be none of your business. You will get what federal officials give you— whether you like it or not.

Those are the high stakes in America’s national health care debate.