As Democrats Talk Single Payer, Insurers Tighten Grip On Medicare

Sen. Bernie Sanders Introduces Medicare For All Act Of 2017

WASHINGTON, DC – SEPTEMBER 13: U.S. Sen. Elizabeth Warren (D-MA) (C) speaks on health care as Sen. Bernie Sanders (I-VT) (2nd L) listens during an event September 13, 2017 on Capitol Hill in Washington, DC. Sen. Sanders held an event to introduceGETTY IMAGES

The creation of another national health insurer planning to grow its private Medicare Advantage business comes as proposals grab headlines for a single payer government-run approach that could uproot such companies.

Health insurer Centene last week announced plans to buy WellCare Health Plans for more than $15 billion in a deal that will make the combined company a stronger player in the fast-growing Medicare Advantage business. Both are already growing rapidly administering Medicaid benefits for states and selling individual coverage under the Affordable Care Act.

“With Medicare, it’s actually one of the things we are most excited about,” WellCare CEO Ken Burdick told analysts last week during an hour-long conference call to discuss the merger. “We see this transaction as fundamentally improving our Medicare operation. We think it’s going to really propel us into a much more competitive position going forward.”

Medicare Advantage plans contract with the federal government to provide extra benefits and services to seniors, such as disease management and nurse help hotlines, with some even providing vision and dental care and wellness programs. And the Centers for Medicare & Medicaid Services is changing regulations to allow Medicare Advantage plans to provide broader coverage in the future and coverage of more supplemental health benefits.

But some Democrats in Congress and several running for their party’s nomination for President in 2020 favor a single payer version of “Medicare for All” that would uproot the private insurance system and bring an end to the health insurance company’s role in administering benefits. Phasing out the health insurance industry is a part of U.S. Sen. Bernie Sanders’ presidential campaign and he’s led the charge on the Medicare for All Act that has support from other Democrats running for president including Sens. Elizabeth Warren (D-Mass), Kirsten Gillibrand (D-New York) and Kamala Harris (D-California).

Yet talk of single payer approach comes as seniors flock to Medicare Advantage, which is administered by many health insurance companies and is quickly approaching half of the U.S. Medicare enrollment.

The Centene-WellCare deal would create a business with more than 900,000 seniors enrolled in Medicare Advantage, helping it compete with national health insurers Cigna, Humana, UnitedHealth Group and the Aetna health insurance unit of CVS Health.

Across the country, more than 22 million seniors are signed up for Medicare Advantage with projections that there will be nearly 40 million or 50% market penetration by the end of 2025.

Though the health insurance lobbies, America’s Health Insurance Plans and the Blue Cross Blue Shield Association, are spending a lot of time, money and attention to the single payer push, Centene’s CEO Michael Neidorff takes the debate in stride, calling it “headline volatility.”

But where some executives may see “uncertainty” as Neidorff describes it, he sees opportunity. “We see that as an ideal time to take appropriate actions based on today’s facts,” Neidorff, who lead the combined company as chairman and CEO, told analysts last week. “When it comes together, we will be in a stronger position . . . no matter what happens.”


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s