Time to bring back the public option — Medicare in all exchanges

Now that Republicans have all but given up the ghost of repealing the Affordable Care Act, we can begin to focus on improving the law, which is what the American people overwhelmingly want. Here’s a way to quickly bring more competition into all the exchanges and guarantee people a choice of doctor and hospital: Bring back the public option by having Medicare offer coverage in all of the exchanges.

A study released last month found that competition in healthcare exchanges does lead to lower premiums. If every exchange had a major health insurer, rates would be 11 percent lower. It is true that more insurers plan to enter exchanges in 2015, which will be helpful in controlling premiums. But that still does not guarantee the major competitor needed in every health market in the country.

{mosads}Many of the existing and new plans in the exchanges are charging lower premiums by offering “skinny” networks. That’s a metaphor for a limited choice of doctors and hospitals. Requiring people to find another doctor is not popular, and Republicans are quick to make an issue of it. Limiting choices can be more than an inconvenience for some people with serious health issues. The available medical specialists and hospitals in a network may not have the expertise to treat complicated or less common health conditions, or they may not be as practiced at treating the condition, which increases the chances of complications and death. Access to the right teaching hospital can be key for treatment of many serious conditions.

Making Medicare available in every exchange would solve both of these problems. Medicare certainly qualifies as a major health insurer. It actually has a better record of controlling health insurance costs than private insurance. That would guarantee competition. And almost all of the nation’s health providers accept Medicare. In fact, the proportion of doctors who are accepting new Medicare has increased a bit recently and is higher than the share of doctors accepting new privately insured patients. The threat to quality of care from limiting access to the right providers would be gone, as would the political issue of people not being able to keep their doctor.

Medicare is also leading the way toward the creation of large, integrated health networks called Accountable Care Organizations (ACOs). Properly structured, these networks will include the full range of primary care providers and specialists, as well as a variety of hospitals that have good records of providing more routine and more specialized care. The financial incentives for the ACOs aim at rewarding them for providing quality care instead of rewarding them on quantity.

Medicare would have to make a few adjustments to operate in the exchanges, including integrating its doctor, hospital and prescription coverage and designing its coverage to meet ACA requirements, such as limiting out-of-pocket costs. It will also need to enroll pediatricians in its network. But none of these changes should be obstacles to offering coverage under the ACA.

I know that there is no chance now of Congress voting to open the exchanges to Medicare. But there is also no chance of Congress enacting the policies Republicans are floating: taxing health benefits; raising deductibles even higher; shoving people with pre-existing conditions into high-risk pools. However, over the long run, bringing back the public option through Medicare has two big advantages over these Republican ideas: It would be popular and it would actually solve the real shortfalls of the ACA.

With the turn from “repeal” to various forms of “fix,” the ACA debate is finally at the same place as the other major federal programs that guarantee security to Americans: Social Security, Medicare and Medicaid. We don’t debate the existence of the programs, but we do argue about their shape and direction. All three of these programs provide better benefits to Americans now than they did when they were first enacted. That is because, over time, our political system does respond to the real needs the public has for affordable healthcare and a secure retirement. In today’s economy, with wages stagnant and benefits at work shrinking, the demand for public solutions to increase economic security will only increase.

It is not too early to start debating the best way to strengthen the ACA. Making Medicare an exchange option is a common-sense step that will control costs and improve access to the health of Americans. Its time will come.

Kirsch is a senior fellow at the Roosevelt Institute and a senior adviser to USAction. Follow him @_RichardKirsch.