One Proven Way to Improve U.S. Health Care: Expand Medicare Advantage

Despite the hullabaloo about the need to slow down the rate at which U.S. health care costs are increasing, the percentage of GDP spent on health care continues to rise, reaching 17.9% in 2017. At the same time, health insurance premiums have increased as much as 60% in the individual market in some states. The federal and state insurance exchanges have failed to rein in costs. Now, with the rollback of the mandate that individuals must purchase health insurance, the number of uninsured in the country will climb. Meanwhile, continued federal funding of the subsidy for insurance for the poor is uncertain. Amazon, JP Morgan Chase, and Berkshire Hathaway have announced an initiative to improve health care outcomes and reduce costs, but these efforts have not worked in the past despite the best intentions. It’s time for a better idea that addresses both cost and quality. That better idea is expanding the successful Medicare Advantage program to both Medicaid and employer-covered populations. This program has a proven track record in preserving quality and generating customer satisfaction. If all Americans were covered by the program, selection bias — insurers seeking to cover healthier, more profitable people and shun the sicker and more expensive — would be eliminated (since everyone is in the same risk pool). And health care costs would be better managed because the Centers for Medicare and Medicaid Services would accelerate value-based payments to providers and cost shifting between commercial populations and Medicare would be eliminated.