Election 2016: Seniors

Parties Offer Divergent Prescriptions for Medicare

Clinton wants to expand the existing program. Trump’s signals are mixed, but the Republican platform calls for replacing entitlements with premium support to buy private health insurance.

Robert Calandra

When it comes to the ACA, you won’t hear many complaints from Medicare beneficiaries. But then again, why would you? Some of the Tea Party opposition to the ACA was animated by fears that to extend health insurance coverage to more young and poor people the law would expand Medicaid at the expense of Medicare beneficiaries. But by design, the ACA actually sweetened the deal for Medicare beneficiaries in some respects. Most notably, it gradually eliminates the “donut hole” of greater cost sharing in Part D prescription drug coverage, and free wellness visits were added to Part B coverage. The wellness visits have a pitfall, though. If there is a discussion of an ongoing condition, it is no longer deemed a wellness visit and the usual Part B cost sharing applies.

Average out-of-pocket limit for enrollees in Medicare Advantage plans, 2011–2016

Source: Kaiser Family Foundation

Medicare Advantage under the ACA is a complicated story. At the outset, members of Medicare Advantage plans had some reason to be worried because the law lowers the benchmarks that are used to set payments to the plans, a reflection of the view that the plans have been overpaid (and insurance companies reaped a windfall) relative to per-beneficiary cost in traditional Medicare. The average out-of-pocket limit of the Medicare Advantage plans has increased from $4,313 in 2011 to $5,223 this year, according to a Kaiser Family Foundation analysis. Some senior organizations have criticized the plans, now operating under ACA rules, for limiting access to specialists and steering more care delivery to nurse practitioners and physician assistants. At the same time, Medicare Advantage is more popular than ever. The percentage of beneficiaries choosing Medicare Advantage coverage has increased from 25% in 2011 to 31% this year.

% of Medicare beneficiaries enrolled in a Medicare Advantage plan

% of Medicare beneficiaries enrolled in a Medicare Advantage plan

Source: Kaiser Family Foundation

Hillary Clinton and the Democrats can take heart that senior public opinion is on their side when it comes to Medicare, as it traditionally has been. According to Kaiser’s tracking poll, conducted before the conventions, 45% of senior voters say they trust the Democratic Party to determine the future of Medicare compared with 41% that trust the Republican Party.

The messages from Donald Trump and the Republicans about Medicare have been mixed. In interviews last year, Trump said he agreed with Ben Carson’s plan to replace Medicare with health savings accounts but also described Medicare as a program that has actually worked. The party platform hews to previous Republican proposals to replace the current entitlement to Medicare benefits with “premium support”: payments that would go toward the purchase of private health plans. The premise is that demographics and generous benefits make the current Medicare system unsustainable and that premium support and private heath insurers would bring some market discipline to the program. There’s also a reference to raising the age at which someone would become eligible for Medicare, although a specific age is not mentioned.

Rather than restrict the number of Americans covered by Medicare, Hillary Clinton has proposed expanding the program so that those 55 and older could buy into it if they wished. Providers might push back against that change because Medicare payment rates are lower than those of private insurers. Clinton also supports allowing Medicare to negotiate drug prices, a position that Trump took early in the primary season, but that is not mentioned on his website or in the Republican party platform. Instead, the Trump website argues for allowing consumers to buy drugs from overseas suppliers in countries where the price is much lower. The Democratic Party platform has been described as being “oddly silent” about Medicare. It promises that the party will fight Republican efforts to “privatize, voucherize or ‘phase out’ Medicare” and mentions the Medicare-for-more proposal and drug price negotiation but not any changes to the program itself.