This op-ed from The Hartford Courant is by Ted Doolittle, Healthcare Advocate for the State of Connecticut. He previously served as a senior Medicare official, and before that worked for a major health insurer. He’s my son, too.
The insurance companies have launched an all-out campaign against Medicare expansion, stoking fears that any such plan will take away health coverage from millions of us and destroy health insurance as we know it. The dirty secret the insurers don’t want us to know is that while keeping the gold-plated status quo in place is by far their first choice, the second-best thing that could ever happen to the industry is Medicare expansion.
The history is that major Medicare expansions result in big, stable, lasting growth for the health insurers. This happened when we added drug coverage in 2006, and when Medicare Advantage began in 1997, giving folks the option of getting their Medicare directly from carriers through HMO-like plans. There is no reason to suppose that an even larger future Medicare expansion won’t again produce a boost for insurance companies.
That’s because Medicare never was a classic New Deal-style program run by a large staff of federal employees in the vein of Social Security. Rather, Medicare from the start has been quietly the most successful public-private partnership in American history. The program ever since 1965 has been administered by a relatively tiny federal staff overseeing an army of thousands of for-profit companies, including all the major health insurance carriers.
That’s why, backstage and with makeup off, few savvy insurance executives would stand by the industry’s public position that Medicare expansion will destroy their companies. To the contrary, the best-informed industry leaders know perfectly well that any expansion would mean massive new business for them.
And every so often, an insurance bigwig makes a telling slip in public that gives away the game. For instance, former Aetna CEO Mark Bertolini expressed openness to Medicare expansion, saying, “The government doesn’t administer anything … the industry has always been the back room for government. If the government wants to pay all the bills … and we can be there in a public-private partnership to do the work we do today with Medicare … then let’s have that conversation.”
Similarly, Bruce Broussard, CEO of Humana, twice recently described Medicare for all as a significant business opportunity. This heresy — he called Medicare expansion “a great opportunity for the industry to be able to expand the population that it’s coordinating care with” — quickly earned him yowls of protest from free-market purists who apparently have no clue that Medicare has always been delivered by private industry under government oversight.
These are not the words of people worried that their companies are on the line. No, this is what people say when they know that Medicare already is one of their best clients, and that the last two rounds of Medicare expansion were slam dunks for them.
This is not to say that some of the expansion proposals wouldn’t drive modest job losses at the insurers. There are a small number of functions, like marketing, that could even become obsolete under the more ambitious proposals. And, yes, there may be some efficiencies of scale. But the most important point is this: Not a single one of the major Medicare expansion proposals requires any change to Medicare’s historic public-private partnership business model, where a very small federal agency with a very large purse simply goes to the marketplace to buy every service required by Medicare.
The truth is the majority of services performed by insurance employees today will always be needed in any health coverage structure, public or private, including Medicare. Think actuaries, anti-fraud personnel, claims processing and bill-payment teams, call centers and IT systems. At the end of the day, whether or not more health coverage is shifted to Medicare, people will get sick all the same, and the system will need to process at least the same number of claims. The nation’s need for generic health coverage work does not go away or even notably shrink if Medicare expands. The only question is, which private companies will Medicare hire to do its new work?