Policy experts and economists doubt, though, that any legislation with legs would immediately reduce payment to the current Medicare rates without a transition period, agreeing it would be politically dead on arrival because it would devastate some hospitals, particularly ones that are already struggling.
They also say that the impact of paying Medicare rates or some percentage of Medicare rates would differ by hospital. Some hospitals are efficient enough to operate on those rates, while others couldn’t without significant changes. But the cost to provide care and how that compares to what Medicare pays can change, explained Ani Turner, an economist at Altarum.
“Hospitals today that are operating at 200% to 300% of Medicare rates … are able to invest in things that they might not choose to invest in if their revenue was lower,” Turner said. “You would just expect that hospitals would begin making different kinds of decisions. Perhaps they are not going to build a whole new maternity tower, for example, or maybe they won’t buy that second or third imaging machine.”
Whether some of those changes required to operate on a leaner budget would lower the quality of care or harm patient health is unknown.
Hospitals would benefit in some ways. Expanding public coverage would reduce the number of uninsured patients showing up to the emergency room. And administrative costs should also decrease under a single-payer program.
Not all healthcare stakeholders resist expanding Medicare. The American College of Physicians, which represents 150,000 internal medicine doctors, has previously supported Medicare buy-in at age 55 and is now evaluating what approaches it will call for to cover all Americans while reducing costs. noted in a blog post, however, that achieving universal coverage would be difficult without making publicly financed coverage available to everyone.
Meanwhile, the National Business Group on Health, which represents large employers that mostly self-fund employee health benefits, wants to preserve employer-sponsored insurance because its surveys show workers are satisfied. Steve Wojcik, the group’s vice president of public policy, said current proposals to expand public coverage aim to control costs by cutting provider rates, which could impact access for patients. He stressed the importance of transforming care delivery to save costs.
Even so, healthcare affordability is an issue for everyone—the federal government, employers, workers and those who buy insurance on the individual market. While most people who buy insurance on the ACA exchanges are subsidized and insulated from rising premiums, millions of people who receive no federal financial assistance have trouble affording premiums and out-of-pocket costs.
Millions more who get health coverage from their employers also have trouble affording healthcare. A Kaiser Family Foundation study this month found that people with incomes below twice the federal poverty level spend an average 14% of family income on their employer-sponsored health premiums and medical care. Experts say that’s part of what’s fueling the Medicare for All discussion.
“Doctor are afraid of high healthcare costs,” Buntin said. “Even people who have insurance are experiencing high out-of-pocket costs and hearing stories about things like unaffordable drugs and surprise bills, and they just have this growing feeling that even if they are insured, they may not be able to get the healthcare they need.”
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