Good for the Exchanges, Good for Medicare
October 09, 20139:37 am
Let’s set aside for the moment the glitches taking place with the Affordable Care Act health exchange websites. It provides grist for late-night comedians, but we can presume the software problems will be fixed. Besides, there are more important aspects of the exchange that warrant attention and discussion.
There was an analysis by Bloomberg Government published yesterday that shouldn’t escape notice. Bloomberg found that competition between health insurance plans within the state-based insurance exchanges is driving down costs, by as much as one-third. Bloomberg found what it called an “unmistakable pattern” – the more insurers operating in a given market, the lower the price of coverage for consumers.
Now, let’s stipulate that it’s early in the process and we don’t yet know how rates will be affected over time, particularly if the Administration is not successful in bringing young, healthy, currently uninsured Americans into the health coverage marketplace. Nonetheless, the linkage between competition and a downward push on prices is significant.
This evidence should be considered in discussions about Medicare’s future. It’s ironic that some of the same politicians who are praising the success of the ACA exchanges in making insurance affordable don’t want to improve Medicare by opening it up to more competition between private plans.
That’s an unsustainable argument. The Medicare Trustees report confirms each year that the program will face insolvency unless there are changes made to the status quo. Congress and future Administrations can continue to squeeze down on what Medicare pays for healthcare goods and services – thus having a negative impact on both healthcare access and quality – or it can look at the Bloomberg study, among others, and see the benefits that can be gained from competition and consumer choice.
You can’t praise the apparent success of the exchanges, but then take a ‘preserve Medicare as we know it’ position. That falls short as both good logic and good policy.
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