In the extensive jousting over Medicare for All, Kamala Harris has evaded scrutiny for the most insidious aspect of her plan: It significantly expands for-profit insurance at the expense of true Medicare by promoting more use of commercial products spuriously known as “Medicare Advantage” and calling that a version of Medicare for All.
One of the successes of Republicans and the insurance industry in recent decades has been to take private, for-profit insurance plans whose business model is based on denying needed care—and brand them as “Medicare.” This tactic, ironically, proves the popularity of universal public programs; Medicare is held in such high regard that private companies feel the need to steal its brand. As the saying goes, hypocrisy is the tribute that vice pays to virtue.
Two examples are the “Medicare” drug benefit, which is purely private, and so-called Medicare Advantage plans, which Harris would dramatically expand.
Unlike true Medicare, Medicare Advantage plans are commercial products offered by private insurers. Medicare’s only role is to collect your taxes and pass them along to these insurance companies.
There are two key differences between Medicare Advantage and standard public Medicare. The first is that a Medicare Advantage plan is an intensely “managed” HMO. The plan dictates what doctors and hospitals you can see, what drugs are covered, and which conditions can be treated by which procedures at insurer expense. By contrast, standard Medicare does not limit your choice of doctor and hospital, or what the doctor can order.
Why would patients put up with such restrictions? Because there are some things that standard Medicare doesn’t cover. That’s why more-affluent older people with standard Medicare tend to purchase what’s known as “Medigap” insurance, to cover what Medicare doesn’t—starting at about $4,000 and a lot more for true comprehensive first-dollar coverage.
Medicare Advantage is no more expensive to seniors than standard Medicare—because insurers are so relentless at restricting what’s actually permitted as opposed to what’s nominally covered. But with true Medicare for All, those gaps in what’s covered would be eliminated—and there would be no need for commercial “Medicare Advantage.”
Medicare Advantage insurers use one other sneaky and perverse trick. They try to save costs by targeting their marketing to younger, healthier seniors, who are less likely to get sick. True Medicare doesn’t need do to that because it is for everyone. With commercial “Medicare Advantage,” insurers make their profits precisely to the extent that they deny care one way or another.
That’s what’s so insidious about Harris’s approach. She would expand the commercial part of the system, falsely branded as a variant of Medicare, and take us further away from true seamless and universal coverage.
Thus the real meaning of “Medicare Advantage.” Advantage: industry. Disadvantage: consumers and patients.
According to some, many seniors like Medicare Advantage, and so it would be folly for Democrats to kill it, just as they supposedly like their employer-provided plans. But this is akin to saying that a refugee “likes” crossing rough seas on a makeshift raft. These plans are popular only given the lack of good alternatives.
In the presidential debates, Harris’s critics have gotten all tangled up in issues of how much her plan would cost and the meaning of the ten-year phase-in. They have missed the single worst thing about it—the reliance on more private insurance. It is a travesty to use the term “Medicare” to characterized this deceptive front for expanding the reach of the commercial insurance industry.