An Interesting But Costly Idea – Medicare X

By Ryan Kelly –

A delegation from Mississippi, including Michael Nester, Tommy Bartlett, Joanie Perkins, Tasha Brown, Alvin Hoover, Paul Gardner and myself, are in Washington D.C. this week to discuss rural health policy and legislation with fellow rural professionals and elected officials and staff.

We had the pleasure of hearing from Senator Tim Kaine (D-VA) and his experience and work to help with rural health improvement.  No doubt, Sen. Kaine has been a rural health champion and has supported good work at improving and supporting many vital programs.

He mentioned a “big idea” program today that I have heard before but not to the depth that he provided.  This program, dubbed Medicare X, would be a public insurance offering from Medicare but offered on the healthcare exchange for non-Medicare beneficiaries.  So essentially, anyone would be eligible to “buy in” to this policy  if they desired to do so.

In brief summary, Medicare X would provide all Medicare benefits plus meet all of the minimum essential benefits provided on the exchange via the requirements of the Affordable Care Act.

I have stated before the concern that we have with the minimum essential benefits of the ACA and the “metal plans” offered through the exchange – which has led to a crisis of “under insurance” in Mississippi.  What I see with Medicare X is a related issue.  Although the coverage of such a policy would be fantastic, I would be very concerned about the affordability of such a policy.

Currently, Mississippi Medicare beneficiaries cost Medicare $11,021 per year in cost, according to the Kaiser Foundation.  This is about the national average.  If we round up a bit for the assumed increase with adding the minimum essential benefits, and if nothing changes for the average cost per beneficiary, then we could naturally assume that the monthly premium for such a policy to be approximately $1,000 per month per beneficiary.

I’m not sure about you, but I don’t know many people that would pay $1,000 per month per person for Medicare X.

To Sen. Kaine’s benefit, it’s an effort to shore-up states like Mississippi where there is only one option on the health insurance exchange.  I admire the effort and understand that there could be a number of factors that, if implemented, could reduce the cost per person.  My recommendation would be to take the minimum essential benefits off of the table, and stagger the cost ratio based on a variety of health-related factors (age, sex, fitness level, etc).  This would help to provide better coverage at a more affordable price and encourage people to live healthier.

There are a number of “big ideas” on the table, alongside ideas including complete Medicare expansion, block granting Medicaid to states, and recreating new insurance plans with greater flexibility.  I think we need to understand the reality of what people need vs. what Washington wants before we make a decision on what direction to go.