A new report from Kaiser signals a tipping point for the Medicare program: While in 2007 only 19% of seniors were enrolled in “Medicare Advantage”—the private alternative to traditional Medicare—today that figure is 48%, with the expectation that next year, it will be over 50%.
The slow but consistent increase in Medicare Advantage enrollment signals that seniors prefer the plans offered by private insurance companies to the traditional Medicare plan offered by the government (what one might call the “public option”).
One might recall former GOP Speaker of the House Paul Ryan, who advocated for changes to the Medicare program, pushing a grandmother off a cliff in a mud-slinging ad from his Democrat adversaries. He—and other Republicans—were demonized for proposing to “privatize” Medicare, but now it seems seniors are more and more often making that choice on their own.
What does this tell us about the future of healthcare policy (or more specifically, policies that govern how we pay for health care)? What does it tell us about policy preferences in general?
We are at a crossroads.
In just the last 10 days, the Biden administration announced student loan forgiveness and signed the Inflation Reduction Act—plans that will together cost more than $1 trillion. These plans signal a willingness among Democrats—just before a midterm election—to more aggressively pursue a domestic agenda predicated on expanding the government.
When it comes to health care, the Biden administration announced by silent omission that the Department of Health and Human Services would renew the Covid-19 Public Health Emergency in mid-October. No doubt the main goal of keeping this “emergency” in place is keeping states from purging their Medicaid rolls of the many costly but ineligible beneficiaries who joined the program during the pandemic but now should return to private plans.
Medicaid is different from Medicare in several ways, but both are government insurance plans. Democrats seem to believe that the more people enrolled in these government plans, the better.
Conservatives propose a different way forward. As we look to the increasing number of seniors enrolling in Medicare Advantage, we can see the clear preference for private insurance over government insurance. And this is no surprise. Generally speaking, private insurance offers members better access to wider networks of healthcare providers.
Moving more people into private insurance (and out of traditional Medicare and Medicaid) would yield another benefit: It would make these programs stronger for those who truly need them. Safety nets are better when they are targeted; they are able to concentrate benefits and services on those with the greatest need.
The latest news about Medicare Advantage would seem to suggest that, regardless of how people vote in elections, when given the choice between private and public forms of Medicare, a quickly increasing share of seniors are voting with their enrollment for the private option(s). It’s not hard to imagine that, if things stay on the current course, rather than having the expensive progressive pipedream of “Medicare for All,” we could end up with “Medicare Advantage for All Seniors,” and, if we are lucky, better more competitive private options for those under 65 as well.