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The troubling financial situation of Social Security and Medicare represented a “slow-rolling catastrophe,” Fox News contributor Charles Hurt said Tuesday.
“The fact remains that they’re going insolvent and something has to be done about it,” Hurt said on “Special Report”.
His comments came in light of a report in which trustees warned the programs were headed for insolvency.
In 2020, the report said, Social Security’s total costs will exceed its total income for the first time in nearly four decades., and in seven years, Medicare’s hospital trust fund will be depleted.
More progressive lawmakers, including Sen. Bernie Sanders, I-Vt., have proposed expanding Medicare to create a single-payer health care system. According to Hurt, that would only make matters worse by further centralizing power in the hands of bureaucrats.
“Unfortunately, the idea of ‘Medicare for All’ — on top of the problems that we’re facing right now — is kind of the typical government answer: more centralized governance from Washington. That’s the whole problem in the first place,” he said.
“Massively” expanding Medicare, he added, wouldn’t fix the program. “It’s going to break it,” he said.
Jonah Goldberg, a senior editor at National Review, argued that while President Trump’sadministration ignored the bleak future of Medicare and Social Security, Democrats proposed policies that would worsen the situation.
“We’re having a massive wealth transfer from young people to old people,” Goldberg said. “It’s not sustainable, it’s got to be ripped up from the ground up.”
Although Hurt acknowledged the situation looked bad, he also predicted that the country’s strong economic situation made it easier for the government to reform those costly programs. “It’s going to be a lot easier to fix these programs with a good economy like the one we have right now,” he said.
What is Medicare Advantage, and how can payers successfully design these plans to maximize value for beneficiaries?
Source: Getty Images
As the US population continues to age, older individuals are seeking out comprehensive, affordable care options that meet their specific health needs. Medicare Advantage is one of the most popular ways for consumers to round out their healthcare coverage as they age.
Traditional Medicare has consistently played a critical role in providing health coverage for those 65 and older, helping them pay for a wide range of services, including hospitalizations, physician visits, preventive services, and hospice care.
While original Medicare has plenty to offer, a market for high-performing, quality private health plans has emerged, giving insurers an incentive to provide optimal, reasonably priced coverage in the form of Medicare Advantage (MA) plans.
Medicare Advantage plan competition is heating up in 2019, with more than 400 options set to hit the market in the coming months.
The Kaiser Family Foundation (KFF) states that as of 2018, one in three Medicare beneficiaries is enrolled in a Medicare Advantage plan.
But what is Medicare Advantage, and how does it work? What do payers need to know in order to succeed in this increasingly competitive market, and how can they ensure that they offer beneficiaries the best possible coverage?
WHAT IS MEDICARE ADVANTAGE?
According to CMS, Medicare Advantage plans are an all-in-one alternative to original Medicare. MA plans are offered by Medicare-approved private companies.
Sometimes called Part C plans, these bundled plans include Medicare Part A (hospital services), Medicare Part B (medical insurance), and usually Medicare prescription drug coverage (Part D).
Beneficiaries can choose from several types of Medicare Advantage plans, with Health Maintenance Organizations (HMOs) and local Preferred Provider Organizations (PPOs) accounting for the majority of total Medicare Advantage enrollment.
Members also have their choice of private fee-for-service plans, in which the plan determines how much beneficiaries will pay for care; as well as special needs plans, which tailor benefits, provider choices, and drug formularies to specific populations.
Each of these plans is required to have a certain number of providers for 26 medical specialties, along with hospitals and other providers within a particular distance of beneficiaries.
The Medicare Advantage market has grown significantly over the last few years. In October 2018, KFF reported that 34 percent of Medicare beneficiaries, or 20.4 million people, were enrolled in Medicare Advantage plans in 2018 – a major increase from 2017.
“Between 2017 and 2018, total Medicare Advantage enrollment grew by about 1.5 million beneficiaries, or 8 percent – a nearly identical rate of growth compared to the prior year,” KFF said.
“The Congressional Budget Office projects that Medicare Advantage enrollment will continue to grow over the next decade, with plans including about 42 percent of beneficiaries by 2028.”
KFF added that there are more Medicare Advantage plans available in 2019 than in any other year since 2009.
“Nationwide, 2,734 Medicare Advantage plans will be available for individual enrollment in 2019 – an increase of 417 plans since 2018. The average beneficiary will be able to choose among 24 plans in 2019, up from 21 in 2018,” the organization said.
Kaiser Permanente, Blue Cross Blue Shield (BCBS) of Minnesota, and Anthem Blue Cross were among the top rated and highest performing Medicare Advantage health plans in 2018.
Cigna, Humana, Aetna, and UnitedHealthcare have also recently receivedquality CMS ratings.
Member enrollment also tends to be concentrated among these firms: KFF states that in 2018, UnitedHealthcare and Humana together accounted for 43 percent of all Medicare Advantage enrollees, while BCBS affiliates accounted for another 15 percent.
Aetna, Kaiser Permanente, Wellcare, and Cigna made up 21 percent of member enrollment in that year.
WHO IS ELIGIBLE FOR MEDICARE ADVANTAGE?
In general, individuals 65 and older can join a Medicare Advantage plan if they meet three criteria:
They live in the service area of the plan they want to join
They have Medicare Parts A and B
They don’t have end-stage renal disease
The open enrollment period for Medicare Advantage and Medicare prescription drug coverage extends from October 15 through December 7 each year.
During this time, beneficiaries can decide whether they want to change from original Medicare to a Medicare Advantage plan, or they can switch from one Medicare Advantage plan to another.
During a separate enrollment period, from January 1 to March 31, beneficiaries can also switch Medicare Advantage plans, or disenroll from Medicare Advantage and return to original Medicare. However, beneficiaries cannot switch from original Medicare to Medicare Advantage during this period.
WHAT DO MEDICARE ADVANTAGE PLANS COVER?
Medicare Advantage plans must cover all the services that original Medicare covers, CMS states. Original Medicare will also cover the cost of hospice care and some costs for clinical research studies for Medicare Advantage beneficiaries. Medicare Advantage members are always covered for emergency and urgently needed care.
However, each Medicare Advantage plan can charge different out-of-pocket costs, and can have different rules for how beneficiaries receive services. These rules can include whether beneficiaries need a referral to see a specialist, or whether members have to see in-network doctors, facilities, or suppliers for non-emergency care.
While Medicare Advantage plans can choose not to cover the costs of certain unapproved or elective services, beneficiaries can appeal the decision. Beneficiaries or their providers can also request to see if an item or service will be covered by a plan in advance.
CMS also notes that most Medicare Advantage plans may offer extra coverage, such as dental, vision, hearing, and health and wellness programs.
Members will usually pay a monthly premium for Medicare Advantage and a monthly Part B premium.
Premiums under Medicare Advantage are undergoing a steady decline, CMS recently reported, with the average 2019 Medicare Advantage premium decreasing from $29.81 to $28.00. As of 2019, the average Part B premium is $135.50, or higher depending on the member’s income.
Out-of-pocket costs in a Medicare Advantage plan depend on whether plans charge a monthly premium or whether plans pay any of the monthly Part B premium.
Out-of-pocket costs will also depend on whether members need extra benefits and whether the plan has a yearly deductible or any additional deductibles. Plans have a yearly limit on out-of-pocket costs for beneficiaries, so once members reach a certain limit, they pay nothing for additional covered services.
CMS notes that individual Medicare Advantage plans, rather than Medicare, determine how much beneficiaries pay for covered services. The amount members pay for premiums, deductibles, and services may change only once a year, on January 1.
HOW DOES MEDICARE ADVANTAGE RELATE AND COMPARE TO ORIGINAL MEDICARE?
Beneficiaries who choose to join a Medicare Advantage plan still have Medicare, CMS notes, and Medicare pays a fixed amount each month to the companies offering Medicare Advantage plans. Private companies offering Medicare Advantage must follow rules set by Medicare.
When deciding between original Medicare and Medicare Advantage, beneficiaries should carefully review and consider the details of both plans. Depending on an individual’s health, budget, and acceptance of financial risk, Medicare Advantage could prove more or less beneficial than original Medicare.
For example, Medicare Advantage plans tend to have a more limited network of providers than traditional Medicare plans. A 2017 study from KFF showedthat 35 percent of Medicare Advantage beneficiaries were in plans with narrow physician networks. These plans offer enrollees access to less than 30 percent of physicians in a county.
However, for those who take prescription drugs, Medicare Advantage may be the better option. Original Medicare doesn’t cover the cost of prescription drugs unless members also enroll in Medicare Part D.
In contrast, drug costs are often covered under Medicare Advantage plans. KFF previously reported that 88 percent of Medicare Advantage plans offered prescription drug coverage in 2017.
Medicare Advantage plans also provide out-of-pocket spending caps, and some offer dental and vision coverage, while traditional Medicare plans do not.
HOW CAN PAYERS ADD MORE VALUE TO MEDICARE ADVANTAGE PLANS?
While the Medicare Advantage market has grown considerably in recent years, research has suggested that these plans can leave consumers feeling less than pleased.
In 2018, JD Power found that Medicare Advantage consumer satisfaction scores dropped from 799 in 2017 to 794 in 2018. The survey revealed that plans were failing to communicate effectively with members and to ease financial burdens for Medicare Advantage enrollees.
“Efforts to help beneficiaries better manage and reduce out-of-pocket spending associated with their care and coordinating care between providers are some of the most powerful drivers of satisfaction, yet few plans fully deliver on that capability,” Valerie Monet, Senior Director of the Insurance Practice at JD Power, said at the time.
In order to engage consumers and stand out in an increasingly competitive environment, payers may need to implement new strategies and approaches in Medicare Advantage plans.
Increasing personalized communication
Tailoring communication efforts to individual beneficiaries could increase member engagement. A recent HealthMine survey found that 60 percent of Medicare Advantage enrollees feel that plans aren’t doing enough to inspire personal health improvements.
With many beneficiaries living with one or more chronic conditions, payers should pay attention to modifying communication and engagement techniques to fit each individual’s specific lifestyle and health needs.
To achieve this, payers can use digital channels, such as email and text messaging, to connect with patients and provide them with resources that could improve their health.
Payers can also leverage these technologies to help beneficiaries choose an appropriate Medicare Advantage plan. Under a rule passed by CMS in 2018, payers are able to promote new, digitized member engagement strategies.
“CMS noted that more sophisticated approaches to consumer engagement and decision making should help beneficiaries, caregivers, and family members make informed plan choices,” the agency said.
Using data to enhance social determinants benefits for members
The social determinants of health play a critical role in overall health and wellness. Particularly in older and vulnerable populations, the conditions in which people live, work, and socialize can have significant effects on physical wellbeing.
To improve Medicare Advantage benefits, payers can use existing health plan information to target individual and community factors that may contribute to poor health. Major payers have launched programs to implement community-level changes.
Humana’s Bold Goal initiative, for example, seeks to improve the overall physical and mental health of its Medicare Advantage members by targeting factors such as food insecurity, housing instability, social isolation, and limited English proficiency.
“As the US population ages, we need to support their needs as well as the nurses, physicians and caregivers who are providing direct services and care,” said Bruce D. Broussard, Humana’s President and CEO.
“Our Bold Goal has helped us understand the needs of our members and communities better.”
Other payers, including Blue Cross Blue Shield and UnitedHealthcare, have also initiated efforts to reduce homelessness, improve transportation options, and expand access to community resources.
Customizing pricing for Medicare Advantage plans
Affordability is a major concern for all healthcare consumers, and may be particularly challenging for older populations. A recent poll from the University of Michigan Institute for Healthcare Policy and Innovation found that 45 percent of pre-Medicare adults are not confident that they will be able to afford healthcare coverage in retirement.
To ease financial strain for those enrolled in Medicare Advantage, commercial payers can capitalize on valuable cost-sharing benefits for enrollees. CMS’s 2018 rule enabled customization of cost-sharing and member deductibles for Medicare Advantage members, which can help reduce costs for beneficiaries.
Harvard Pilgrim’s Stride Medicare Advantage Plan offers prescription drug coverage with $0 co-pays, as well as reduced co-pays for provider visits. Humana also offers Medicare Advantage plans with $0 premiums and no annual deductible. Additionally, Anthem BCBS of Kentucky recently expanded its $0 premium Medicare Advantage plans to 29 counties.
Medicare Advantage has grown rapidly and will continue to expand in the future. The market offers lucrative opportunities for payers, but industry players will need to confront challenges in consumer satisfaction and competition.
To stand out in the Medicare Advantage landscape, payers should examine their capabilities, as well as the specific needs of patient populations, to offer the best possible plans for beneficiaries.
Nearly a quarter century ago, then Speaker of the House Newt Gingrich said this about the original Medicare program: “We believe it’s going to wither on the vine because we think people are voluntarily going to leave it — voluntarily.”
Gingrich argued that original Medicare — based on a 1960s-style fee-for-service benefit package with a confusing set of deductibles, co-insurance, and copays — was stuck in the past. He saw a day when Medicare-contracted private health plans would prove so attractive that Medicare beneficiaries would have to choose them.
It’s taken a generation, but Gingrich is on the verge of being right about Medicare.
Medicare began experimenting with managed care as an alternative to the original program in the 1970s, and annually contracted health plans — called Medicare+Choice — were made a permanent part of the program in the 1990s. Because of funding reductions, it initially floundered.
That changed in 2003 with the passage of the Medicare Prescription Drug, Improvement, and Modernization Act, which renamed the program Medicare Advantage, raised payment rates, and added risk adjustment to the payment methodology. Leading managed care companies, such as UnitedHealth Group, Humana, Aetna, and Blue Cross Blue Shield companies, began marketing Medicare Advantage products every fall. So did dozens of smaller and health system-owned health plans. Enrollment in these plans has increased every year since then. Today, more than 22 million beneficiaries choose Medicare Advantage, about 35 percent of all people with Medicare, up from about 11 million people a decade ago. This has occurred despite a gradual phase down in funding put in place by the Affordable Care Act.
In 2019, Medicare Advantage plans stepped up their coverage to include the delivery of meals, rides to physician appointments and pharmacies, home safety improvements, and a host of other new benefits. As described in a new report on Medicare Advantage plans that one of us (M.A.) co-authored, 153 Medicare Advantage plans are now leveraging new Trump administration guidance and experimenting with 842 “flex benefits” this year. These benefits fall into two broad categories: reducing costs to encourage members to receive preventive care, such as free primary and podiatry care for people with diabetes; and non-medical benefits, such as home-delivered meals following a hospital discharge, home safety interventions, and non-skilled in-home caregiving.
Medicare beneficiaries select Medicare Advantage for a variety of reasons. These include catastrophic cost protection, care management programs, and a range of mainly health-related supplemental benefits such as dental checkups, eyeglasses, hearing aids, over-the-counter drugs, and gym memberships. The trade-off for these extras is limited choice of providers and managed care tools like prior authorization. These limitations put off some Medicare beneficiaries, but have not dampened the high overall satisfaction with Medicare Advantage or its continued growth.
Medicare Advantage’s competitive edge over original Medicare will take another step forward in 2020 when plans are expected to gain additional flexibilities in offering non-medical benefits for people with chronic diseases. The next wave of new benefits can include anything that the Centers for Medicare and Medicaid Services deems “has a reasonable expectation of improving or maintaining the health or overall function” of enrollees with chronic diseases. While CMS has not yet offered its final guidance, this will likely include meals, transportation, pest removal, and activities that combat social isolation and depression, which could include companionship services and pet therapy.
Some of the brightest minds in managed care are working to determine whether relatively inexpensive, newly permissible benefits like these will pay for themselves by reducing the number of expensive medical procedures. Actuaries at Wakely Consulting, for example, have modeled the value of a falls reduction benefit. Using Medicare claims data, they determined that injury-causing falls are associated with spikes in medical costs that average about $10,000 compared to pre-fall costs. So an intervention that reduces falls by even 10 percent would likely pay for itself if it costs less than $1,000 per fall-prone member receiving the service. Hiring a handyman for a couple hundred dollars to install grip bars in a shower or modify cabinetry would be a bargain.
How does original Medicare stack up in comparison to Medicare Advantage? The Affordable Care Act and the Medicare Access and CHIP Reauthorization Act(MACRA) introduced value-based reimbursement reforms into original Medicare. These may make the program a more efficient payer, but they do not necessarily improve benefits for Medicare beneficiaries. Medicare Supplement Insurance (Medigap) continues to be purchased by roughly 13 million Medicare beneficiaries. It plugs gaps and simplifies original Medicare’s idiosyncratic coverage, but it is too expensive for lower-income beneficiaries. In addition, state and federal laws prevent Medigap from keeping up with Medicare Advantage.
A 2017 report by the National Association of Insurance Commissioners demonstrates that only a handful of states permit Medigap carriers to offer any “innovative” benefits. And the modest flexibilities permitted — such as eye exams — pale in comparison to the richness and diversity of Medicare Advantage benefits.
In subtle and unsubtle ways, the Trump administration has seeded the ground for massive gains in Medicare Advantage enrollment. These include loosened restrictions on marketing Medicare Advantage plans, new consumer tools that accentuate the advantages of these plans, greater use of telehealth than permitted in original Medicare, the elimination of “meaningful difference” tests that limit the number of Medicare Advantage plans in a given market, and extra time for plan sponsors to secure a provider network. Meanwhile, the administration has finalized a regulation that may substantially lessen the number of accountable care organizations participating in original Medicare — the original Medicare reform with the greatest potential to align providers in reimbursement systems outside of Medicare Advantage.
Congress has also quietly added tools to Medicare Advantage that aren’t available in original Medicare. A little-noticed MACRA provision will remove two of the most popular Medigap plans from the market in 2020, further weakening its value proposition versus Medicare Advantage. This is not an accident: Many conservatives have long disliked original Medicare’s centralized pay schedules and the perverse incentives of fee-for-service medical care. And many liberals are willing to strengthen Medicare Advantage if that’s the only way to offer more generous health care coverage to seniors.
Intentionally or not, Congress and various administrations have created two Medicare programs: the original fee-for-service program with rules and coverage that the private market largely abandoned decades ago, and a managed care program that has just benefited from another set of favorable legislative and regulatory tweaks. Maybe it is unfair that policy makers are favoring Medicare Advantage. But if this is the only way to deliver modern and more generous health benefits to Medicare beneficiaries, then a thumb on the scale is better than denying beneficiaries access to 21st-century benefits.
It’s no wonder that Medicare beneficiaries are voluntarily leaving original Medicare — voluntarily.
If you’re going to buy life insurance, it should be enough to provide for your loved ones in the event of your passing. Here’s how to figure out how much coverage your family requires.
If you have people in your life who depend on you financially, or who stand to be hurt financially if you were to pass, then there’s no question about it: You need life insurance to ensure that your loved ones are covered if the worst were to happen. But just how much life insurance should you buy? There are several factors that need to go into that decision, like your annual salary, the amount of income replacement you’re looking for, and the amount you think you’ll need for final expenses, including funeral costs. Here, we’ll help you determine how large a life insurance policy to buy so you’re covered without going overboard.
Types of life insurance
There are many types of life insurance, and the kind of policy you choose will heavily influence how much your premiums (or life insurance fees) end up costing you. Life insurance is generally divided into two main categories: term life insurance and permanent life insurance.
IMAGE SOURCE: GETTY IMAGES.
As the name implies, term life insurance is designed to cover you for a certain period of time, whether it’s 10 years, 20 years, 30 years, or whatever term you choose. If you pass away during that window, the designated beneficiaries on your policy will get the death benefit the policy entitles them to. Therefore, when we talk about how much insurance to buy, we’re really talking about how much of a death benefit you’d like your loved ones to collect.
Term life insurance is considerably cheaper than permanent life insurance because it doesn’t cover you for life; rather, it runs out at a predetermined point in time. As such, when you buy term life insurance, you run the risk that it will expire before you need it. Furthermore, term life insurance doesn’t build a cash value over time, which means that once your policy runs out, it’s worth nothing to you, whereas permanent insurance does accumulate a cash value.
So let’s talk about permanent life insurance, because the primary benefit in getting it is lifetime coverage coupled with the opportunity to have your plan accrue a cash value account, which will grow at a guaranteed rate. The most common type of permanent life insurance is whole life insurance, which gives you the option to borrow against your cash value or even cash out a portion of your policy if you want or need the money (keeping in mind that the more you cash out, the less of a death benefit you get).
Variable life insurance is another permanent option, and it works just like whole life with one exception: Whereas the interest you earn on the cash value portion of a whole life policy is fixed, earnings on a variable life policy are — you guessed it — variable. The cash value account is invested in “sub-accounts,” which are similar to mutual funds, giving it the potential to grow much faster. On the flip side, it has the potential to lose value.
Then there’s universal life insurance, which allows you to increase or decrease your death benefit as your needs evolve. Furthermore, you can use the cash value portion of your account to cover your premiums. Finally, there’s variable universal life insurance, which allows you to invest some or all of your cash value to grow it into a larger sum.
If you’re looking for a simpler life insurance product, your best bet is generally either a term life or whole life policy. And if you’re looking to keep your costs as low as possible, term is usually the way to go.
Applying for life insurance
Though you can apply for life insurance by calling up different insurance companies and asking for quotes, a smarter bet is usually to find an independent insurance agent — someone who doesn’t work for a single company, but rather can get you quotes from a number of different companies. That agent will gather some basic health information about you to get those quotes, keeping in mind that the amount you’re charged for life insurance will depend heavily on factors such as your age and general health.
Once you decide to apply for a specific policy, you’ll be asked to complete an application that will ask detailed questions about your medical history. You’ll also need to complete a medical exam to get approved. Generally, your insurance company will send a nurse or medical representative to your home to make that exam more convenient for you. You can expect to have your weight and blood pressure recorded, and you’ll need your blood drawn to be tested for underlying conditions or diseases that might affect your eligibility for a policy. Once that information is processed and approved, your policy will be written up, at which point you’ll sign a contract, submit your first premium, and secure that coverage.
Buying the right amount of life insurance
When it comes to buying life insurance, finding the best premium price and choosing between your various options is only part of the picture. You’ll also need to determine how much of a death benefit you want your beneficiaries to receive after you pass. Keep in mind that if you’re buying permanent insurance, your policy will accumulate a cash value, which means that you won’t necessarily need to wait until you die to collect that benefit; you can instead cash out your policy and take the money you’re entitled to.
That’s an important point to consider, because some people who buy permanent life insurance use it as a savings vehicle of sorts. If you’re hoping to accumulate cash in your life insurance policy that you can use in retirement, for example, then you’ll need to consider how much income you may want from that policy down the line (keeping in mind that there are other, and generally more cost-effective, ways to save for retirement, such as putting money into a 401(k) plan or IRA). For the purpose of this discussion, however, we’ll assume you’re looking to determine the right death benefit so that your beneficiaries are covered financially in the event of your passing.
The easiest way to figure out how much life insurance you should buy is to aim for a death benefit that’s a certain multiple of your income. Common choices include five, seven, and 10 times your salary, though many financial advisors suggest playing it safe and opting for the latter.
That said, there are other considerations that may prompt you to secure an even higher death benefit than a simple multiple of your salary. Here are a few to factor in.
1. Outstanding debts
If you pass away with outstanding debt, your loved ones may wind up responsible for paying it off. And that’s probably not a burden you want to put on them.
If you’re like most people, your single largest chunk of debt will probably come in the form of your mortgage, so it’s a common practice to factor that balance into your total death benefit. For example, if you owe $200,000 on your mortgage, you might add that sum to your total death benefit so your family can pay off your home loan when you pass. If you have other types of debt, such as that of the credit card variety, you should also account for it in your calculations. If you don’t, it will generally come out of your estate after your passing.
If you have children, then you might consider buying a life insurance policy that can cover some or all of their education costs. You don’t necessarily need it to cover the cost of the most expensive colleges out there. Rather, aim to have your death benefit provide enough income to cover the cost of in-state college tuition, and perhaps room and board to boot.
Maybe you’ve always dreamed of paying for your children’s weddings, or giving them each a down payment to buy their first home. Those goals don’t have to fall by the wayside if you pass away sooner than expected. You can factor them into the death benefit you choose.
4. Final expenses
These days, the average traditional funeral costs between $7,000 and $10,000. That includes a funeral service, burial at a cemetery, and headstone installation. Many life insurance buyers include these and other final expenses in their life insurance policies so that their family members don’t have to think about bearing the cost on their own.
5. Extra peace of mind for your loved ones
You might add up the aforementioned items, coupled with a certain multiple of your income, and land on a number that seems to offer comprehensive coverage for your beneficiaries upon your passing. But what if you’re looking for extra peace of mind? Perhaps you’d feel better knowing that your life insurance policy offers an extra financial cushion for your loved ones, whether it’s money to take vacations, pay for future medical expenses, or simply have more savings. If that’s the case, and you can afford a little extra coverage, it certainly doesn’t hurt to have it. That said, you don’t want to buy coverage you don’t need, either, as doing so could really add to your premium costs.
Once you figure out how much of a death benefit you may want for your loved ones, you can take a look at your existing assets and use that figure to offset the amount of coverage you need. For example, let’s say you earn $100,000 a year, and you want a death benefit that covers 10 times that amount. Let’s also assume you owe $200,000 on your mortgage, you’ll need $400,000 to cover college costs for your two children, you want another $100,000 to pay for two weddings, and you want an additional $50,000 to pay for your final expenses and give your family a modest cushion. All told, you’re looking at a death benefit worth $1.75 million.
But what if you currently have $100,000 in savings and another $150,000 in a college fund for your kids? You can then subtract that $250,000 and land on a $1.5 million death benefit, which will be cheaper to procure than a death benefit worth $1.75 million.
Another thing to keep in mind is that your employer may provide some amount of life insurance to you as part of your workplace benefits package. If that’s the case, you can deduct that amount from the total you’re targeting, provided that plan is portable — meaning it’s not tied to a single job and can continue offering you coverage if you switch employers. For example, if you’re targeting $1 million in coverage but have $100,000 in coverage through work, you can buy a $900,000 policy instead.
There’s another factor to consider, too: If you have a spouse who’s a stay-at-home parent, you may want to buy life insurance for him or her as well. The reason? Even though that person doesn’t earn an income, the fact that he or she is there to watch your children means you don’t have to spend money on child care. If you have young kids, then it pays to figure out the cost of child care and get a policy for your spouse with a death benefit that reflects that expense. On the other hand, if you have teenage kids who can get themselves to school and stay home on their own while you’re at work, then you don’t necessarily need to worry about child care costs.
Finally, if you’re struggling to figure out how much life insurance you need, you can always use this life insurance calculator to help you land on the right number. And if you’re still not sure, speak to your financial advisor, if you have one. He or she can make recommendations that help you buy the right amount of coverage for your family without going overboard.
Saving money on life insurance
Once you figure out how much life insurance you need, your goal should be to secure it at the lowest possible price. There are several ways you can save money on your life insurance premiums.
1. Choose term life insurance over permanent life insurance
Term life insurance is pretty much always cheaper than permanent insurance when you’re talking about the same death benefit. If your estate isn’t particularly complex, and you don’t have special needs to account for (say, a child who might need lifelong care), then you can save a bundle by opting for a simple term policy that covers you until a period when your children enter adulthood and your spouse is entitled to Social Security and other retirement benefits.
2. Apply for life insurance when you’re relatively young
The younger you are when you apply for a policy, the more likely you are to snag a favorable rate on your life insurance premiums. That said, if you’re 22, are not married, and don’t have anyone who depends on you financially, you can probably wait. On the other hand, if you’re 32, married, and thinking of starting a family, waiting until your late 30s to get insurance might push up your costs.
3. Find the right insurance agent
Independent insurance agents can get you quotes from different companies so that you’re able to snag the most competitive rates out there. It pays to find a trusted agent who will seek out the best options for you, so don’t hesitate to solicit recommendations from friends, neighbors, colleagues, family members, or your financial advisor, if you have one.
4. Lose weight
Being overweight is linked to a host of medical conditions that increase your likelihood of passing away at a younger age than your peers. As such, it pays to apply for life insurance when your health is optimal — meaning, at a time when your weight is at a healthy level.
5. Quit smoking
Not only is smoking an unhealthy habit, but it could cause your life insurance premiums to skyrocket. Smoking is said to have a greater impact on life insurance premiums than any other factor. If you kick that habit, you’ll not only reduce your premium costs, but also free up cash in your budget for other financial goals.
6. Disclose all medical issues up front
Lying about health issues may seem like a good way to save money on life insurance, but in reality, you’ll only be shooting yourself in the foot. That’s because life insurance companies don’t give out policies without doing their homework, and if a health issue is discovered that you fail to disclose initially, it could cause your costs to climb. On the other hand, if you’re honest from the get-go, the agent you work with can search for the most competitive rates from the start. Some insurance companies, for example, are more flexible than others when it comes to specific health issues, so honesty really is your best policy.
7. Pay your premiums annually in one lump sum
Most insurance companies offer you the option to either pay your premiums once a year or spread them out across 12 months. If you can swing that annual lump sum, you’re better off going that route, as insurers usually tack on extra fees for paying monthly.
8. Don’t overbuy
Your goal in purchasing life insurance should be to secure a high enough benefit to cover your loved ones when you pass away. That said, you don’t want to buy an excessive amount of coverage, because the greater your death benefit, the more it’ll cost you. And if you take on too high a premium, you run the risk of falling behind on your payments and losing your policy as a result. In other words, if your household income is $100,000, and you own a $300,000 home, you probably don’t need a $4 million life insurance policy.
The bottom line on buying life insurance
If you’re setting out to purchase life insurance, the key is really to strike a balance between securing adequate coverage for your family and keeping your premium costs manageable. Remember, too, that it’s possible to buy a certain amount of coverage now and add to your policy later on. In doing so, you do run the risk of being denied, or getting hit with expensive premiums, if your circumstances change. At the same time, you shouldn’t buy life insurance you can’t afford. If you do, you might fall behind on your payments, leading your insurance company to cancel your policy and leaving your family in the lurch.
As presidential hopeful Sen. Bernie Sanders (I-Vt.) grabs headlines with his plan for “Medicare for All” and targets doing away with private health insurance, equity analysts have been working overtime to tell investors what companies have the most to lose.
Health insurers and now hospitals have led the sector-wide plunge even as policy analyst like Veda’s Spencer Perlman argue that Medicare for All has a slim shot at becoming law. With the plan moving 10 percent of GDP to public control from private hands, “it is unprecedented in scale and scope – nothing of this magnitude has ever been attempted, let alone succeeded,” Perlman argues.
That hasn’t stopped the free-fall in insurers, which has peeled off billions of dollars from their market-cap in the worst rout in more than twenty years. “There may be more pain to come but the worst of it may be behind us (let’s hope),” Evercore ISI equity analyst Ross Muken told clients in a note. While managed care may be near the end of its retreat, analysis implies “extremes are plausible.”
While the broader healthcare sector remains under pressure — S&P 500 health care names have lost more than 6 percent over the past three days in their biggest drop since December — managed care’s sell-off appears to have abated for now with S&P 500 insurer names now little changed intraday.
Drugmakers, dental stocks and life science tool makers look the most vulnerable, in Muken’s view. For Citi analyst Andrew Baum the pervasive fear that the skyrocketing price of prescription medicines will be brought under tighter rein in a Medicare for All scenario has created an opportunity for long-term pharmaceutical investors. Baum recommends buying AstraZeneca, Sanofi, Novartis, Bayer as well as Merck & Co.
Some drugmakers are at greater risk than others and underperformance in the sector is likely to persist, Wells Fargo’s David Maris told clients in a note. Deeply indebted companies or those with medicines that are heavily used by Medicare recipients or subject to rebating — like Bausch Health — may be most exposed. Smaller generic companies or those with cash pay products should be better insulated from sector concerns although so far “that has not been the case,” he noted.
Device-makers have also been dragged into the fray although later than other health-care sectors. While the prospect of a single-payer system remains remote, it would be especially damaging to medical technology companies by eroding erode structural incentives for surgical interventions, BofAML analyst Bob Hopkins wrote. These are the companies with sales most at risk, according to BofAML:
Likely less than 50 percent of sales paid in cash: Stryker, Intuitive Surgical
Companies with roughly half of their sales exposed: Medtronic, Zimmer Biomet, Becton Dickinson, Edwards Lifesciences, Boston Scientific
Least exposed: the recent Novartis spinoff Alcon, Abbott Labs and Baxter
“The U.S. is likely to gradually move away from our current fee for service, employment-based system to some sort of hybrid system that resembles certain systems in Europe,
but in our view this will take a decade or more,” Hopkins said.
Follow the debate with a “wary eye,” Veda’s Perlman cautioned investors. “Health-care lawmaking is difficult and change occurs infrequently. This is not a bug in the American political system, it is its design.”
Patricia – Pennsylvania: I am 72 years old. I work for the City of Philadelphia and plan to work until 75. I have been told I would not be required to take Part B of Medicare (I only have A) until I am retired for six months, even though my city benefits are for five years.
It was suggested that it would be better not to wait the six months because if I had a catastrophic illness, my city insurance would only pay 80 percent of my covered expenses, leaving me with a huge bill. If Part B was in place, it would be my primary insurance and the city’s insurance would be secondary.
However, I also have been told by others that I should have signed up at 65, and I will be penalized from 65 until now. Is this true? If so, both my husband and I have been fed extremely poor information. Please let me know what I am to do and who is giving me the proper information.
Phil Moeller: If you are actively employed and have employer group health insurance, you did not need to get Medicare when you turned 65 and do not need it now, although you could if you thought it would improve upon your existing coverage and was worth the price.
If you didn’t get Medicare at 65, you would not be later charged with late-enrollment penalties, so long as your employer signed this form indicating you’ve had insurance coverage. The form would be presented when you later needed Medicare.
There is an eight-month special enrollment period that begins on the date a person aged 65 or older loses employer coverage. However, your intuition is correct – you should apply for Medicare early enough so that it will have taken effect by the time your employer coverage ends.
It sounds like you will have retiree coverage and Medicare for five years after you stop working. It would be a good idea for you to find out exactly what your retiree plan covers and how it and Medicare would coordinate payment of any covered insurance claims.
People often are reluctant to talk with their insurers, but I’ve found this is usually the best way to get helpful information. My advice is necessarily general in nature as there are lots of different employer plans and I don’t know the details of your plan.
Carol – South Carolina: My husband and I will both turn 65 later this year. We are retired and currently on COBRA from his employer. His employer says I should delay signing up for Medicare for one month. I am reading about all these penalties if you don’t sign up when you become eligible. Should I just sign up in August and pay the COBRA premium as usual? His employer says they will give me a letter and just wait until September when my husband will sign up. I am concerned about that as employer is in a different state and may not understand the rules fully.
Phil Moeller: You should not have to worry about penalties. There is a seven-month initial eligibility period for Medicare, and the start date of your coverage depends on when during this period you enroll.
I always tell people with COBRA that their main concern should not be penalties but making sure they do not have an unintentional lapse in primary health coverage.
Your COBRA insurer, for example, may not continue to provide primary coverage when you turn 65 and would expect Medicare to become your primary insurer then. I urge you to speak with your COBRA insurer to find out if this will be the case.
Svet: Before he died last year, my father had 38 of the required 40 quarters of work credits needed to qualify for Social Security benefits. Does my mother have a claim to a portion of my father’s partial Social Security entitlement? If not, can she contribute the two “missing” quarters from her work record to receive the appropriate beneficiary benefit for a widow?
Phil Moeller: If your father died after reaching age 62, there is no basis for your mother receiving a survivor benefit, and the rules do not permit another person to contribute credits to his account. If he died at age 60 or younger, she would qualify for benefits because the agency would adjust the hours needed. Thirty-eight quarters of so-called covered earnings would be enough to qualify for someone who died two years before reaching the earliest age at which benefits normally are available.
Svet: My father passed at the age of 69, so unfortunately it seems that being two credits short of the requirement will be our downfall. Our case is unique because my father worked in the United States for many years under a green card visa prior to becoming a U.S. citizen. I understand that green card holders do not pay Social Security taxes so those quarters of employment under the green card visa did not contribute towards the 40-quarter minimum requirement.
Phil Moeller: I am sorry that your mother apparently does not qualify for a survivor benefit. To make sure, she should ask Social Security for access to his formal earnings record.
Dan – Ohio: I just got done reading “Get What’s Yours for Medicare.” It’s a great source of information and, while Medicare is still confusing, it’s less confusing to me now!
My wife is 73, and I am 64. I will be turning 65 soon. My wife has been taking Social Security benefits since she was 62. I would like to apply for my Social Security benefits when I turn 66. My wife was married before to a man around 35 years ago who has since died. She was married to him for about 12 years. The question is, can she apply for survivor benefits from his account? Another question is whether her benefit will go up when I take Social Security at age 66, and she becomes eligible for a spousal benefit based on my work record. What is the better scenario?
Phil Moeller: If she remarried you when she was age 60 or later, she is eligible for an ex-spousal survivor benefit. If she was younger than this when you married, she is not eligible.
When you apply for your benefit at age 66, she will be eligible for a spousal benefit. If it’s larger than her survivor benefit, she’d receive an additional payment equal to the difference. If not, her benefit would stay the same.
Frank: I’m planning to collect Social Security at age 66 this fall. My wife is nine years younger. Can she collect a spousal benefit? I’m already retired, and she is the breadwinner. We want “What’s Ours!” Thanks for the help.
Phil Moeller: If your wife is the higher earner in your household, she should wait as long as possible to claim her Social Security. She won’t even be eligible to file until she is 62, and benefits rise 7 percent to 8 percent a year between 62 and age 70.
If your wife were to file for a spousal benefit when she turned 62, she also would trigger her own retirement filing at that time. Under new rules passed in late 2015, there is no way she can file for a spousal benefit while deferring her own retirement filing.
Joplin resident Keith Adams knew that the deliveries of medical equipment and devices that kept showing up at this doorstep weren’t things he needed. He knew that, despite claims in the packaging, neither he nor his wife’s doctors had ordered the items.
Given those certainties, he also knew that the bills for the orders should be ignored, so he and his family weren’t out any money.
For many others, that was not the case. On April 9, the Department of Justice indicted and charged 24 people in connection with a Medicare scam that the government said resulted in more than $1.2 billion in losses by “hundreds of thousands” of elderly or disabled Americans.
For Adams, it started with a package of insulin needles and alcohol swabs that showed up unexpectedly. The company that sent the package, he said, asked for a co-payment of $52.57. Adams said his wife had no need for the supplies that were sent.
The deliveries didn’t stop, Adams said. Other supplies and equipment continued to arrive, sometimes asking them to pay hundreds of dollars for the items.
“We alerted Medicare on this one and the doctor’s office,” he said. “Supposedly our doctor had ordered it, but when we contacted (the doctor), they had not.
“I called and told them we were returning it,” he said. “And I thought it was a manufacturer, and I asked, ‘Do you have many of these returns?’ And she went silent. Then we got two more, we got one from Arizona and we got one from California, and we refused delivery on one of them and I took one down to UPS and sent it back. We haven’t been out any money, but they billed us over $357.”
A statement from the Centers for Medicare & Medicaid Services sent to the Globe said the organization recommends people avoid communicating with purported medical suppliers and that those who receive medical items or equipment without having ordered it immediately notify the Department of Health and Human Services by calling 1-800-447-8477 or 1-800-633-4227.
“We tell Medicare beneficiaries to never speak to a supplier over the phone if they (the beneficiary) did not initiate the call,” the CMMS statement said. “A beneficiary needs a prescription for any durable medical equipment item and they cannot receive that prescription without seeing their physician first. It’s important for beneficiaries to see their physician to determine if the durable medical equipment or supply is necessary, as they may be doing more harm using a DME supply that is not medically necessary.”
Unsolicited packages or deliveries should be refused or returned without opening or using the items inside, the statement continued.
Adams said that when he has contacted the companies that have sent him and his wife the medical supplies, they immediately disengage when questioned.
“You can’t get any information out of them as to how they got our number or who ordered it,” he said.
Three licensed medical professionals were among the two dozen indicted earlier this month, the DOJ release announcing the charges said.
“The charges announced today target an alleged scheme involving the payment of illegal kickbacks and bribes by DME companies in exchange for the referral of Medicare beneficiaries by medical professionals working with fraudulent telemedicine companies for back, shoulder, wrist and knee braces that are medically unnecessary,” the announcement said.
Prosecutors directly alleged that the companies involved paid physicians to make unsolicited or unnecessary prescriptions for the equipment the companies sent. The companies then tried to obtain payment for those deliveries.
If you’re an empty nester, make sure you’ve done these 3 tasks to turbocharge your 401(k). USA TODAY
Ask someone why they’re investing for retirement, and they’ll usually give two answers: to cover post-retirement living expenses and to help provide for a spouse after they’re gone.
But what if “gone” comes far earlier than you expect? Term life insurance is a great – but often misunderstood – safety net.
Term life insurance is a policy with a fixed end date – usually 10, 20 or 30 years out, depending on when you expect the kids to be out of the house and your nest egg to be sufficient. It is meant to ensure your family can cover funeral expenses, debt and other needs after you’re deceased.
I bought a term life insurance policy after my children were born, and think it’s a smart move for most families. Those wanting lifelong coverage may find permanent life insurance more beneficial.
Yet industry observers have found many folks don’t investigate life insurance options. TermLife2Go, which seeks to help consumers navigate this complex industry, found most people assume life insurance costs three times more than it really does.
Why? Insurance companies can’t provide a quote until you answer a slew of questions about your health, habits and lifestyle. It’s the verbal equivalent of a colonoscopy. Many fear filling out reams of paperwork or taking medical exams, only to find out they can’t afford the insurance. It’s a vicious cycle.
Knowing how companies price life insurance helps you cut through that fog. TermLife2Go has a great online resource showing how insurance rates boil down to six factors: age, health, type and term, desired payout, gender and lifestyle.
Age is simple: The younger you are, the cheaper your coverage. Rates start jumping once you hit 40 and rise as you age, with availability more limited the older you get.
Health is the biggest swing factor. Nonsmokers pay less than smokers. Duh! Good family medical histories and healthy body types help, too. The more health issues you have, the more you’ll pay. Major illness in your family history can also raise costs.
The type and term of plan you want is something you can control. Term life is generally cheaper than permanent policies – less risk for the insurer. A whole life policy – good until you die, as long as you pay the premiums – costs more. These permanent policies build cash value – excess premium that accumulates within the policy. Folks say they’re like savings accounts. Some policies even offer investment options for the cash value. But added costs often make these unattractive.
My advice: You’re usually better off buying cheaper term insurance and plugging the savings into your 401(k). But it’s a personal choice.
Payout is also within your control and simple: The bigger the payout, the bigger the premium.
As for gender, ladies have it easier. Because a woman has a longer life expectancy than a man, her premium is typically lower. The gap isn’t huge, but it is noteworthy.
Finally, lifestyle, is a potpourri. It includes occupation, hobbies, how much you drive and travel (and the relative danger of countries you visit frequently). Folks with high-risk jobs like loggers and roofers pay higher premiums than office workers. So will those with risky hobbies, including motorcycle riding, wilderness backpacking, rock climbing and boating. If you spend too much time swimming with sharks – or boating in high-risk places – premiums get pricey. Couch potatoes typically pay higher rates than active and athletic folks.
Again, whether and what type of life insurance is right for you depends on you and your family’s needs. What I hope you do now is investigate.
Anew drug that cures, or at least delays, a deadly disease like cancer represents a huge advance — unless no one can afford it. Innovation without access is meaningless.
In the past five years, we have witnessed the emergence of revolutionary scientific innovations for treating cancer such as immunotherapies, targeted oral cancer medicines, gene therapies, and more. These new approaches are turning many daunting cancers into manageable conditions.
These new advances won’t realize their full potential, however, unless patients have access to them. As long as patients struggle to pay out-of-pocket costs or are unable to access medicines that may save their lives, the promise of these new therapies goes unfulfilled. This is particularly true for older Americans, who are more likely to develop cancer than younger individuals and who may be living on fixed incomes.
Since its inception in 2006, Medicare Part D has filled a longstanding gap for this population, serving as an effective market-based solution that provides seniors with affordable access to the vast majority of the medicines they need to stay healthy.
Part D has remained relatively unchanged over the last 13 years while revolutionary advances have occurred in the development of complex cancer therapies. As a result, there are now legitimate concerns that Part D, while still an invaluable asset for most health conditions, is falling short in providing protection for seniors who rely on specialty treatments to battle cancer and other deadly diseases.
Current Part D benefit designs result in high out-of-pocket costs for many seniors. Over 40% of cancer treatments covered by Part D require more than $250 in out-of-pocket payments for each prescription. That’s a problem because high cost sharing has been linked to reduced adherence to medicines, risking the health of this vulnerable population. In addition, Part D is front loaded, forcing seniors to bear most of the costs at the beginning of the “donut hole,” which seniors must get through before catastrophic coverage kicks in.
When it comes to affordability, all stakeholders have roles to play. Biopharmaceutical companies like the one I lead must work creatively and collaboratively with insurers, pharmacy benefit managers, federal and state governments, and others to provide access to prescribed therapies. We also have a responsibility to ensure that our medicines are priced fairly in a way that reflects the innovation and value they deliver to patients, health care systems, and society.
I see four ways to help Medicare Part D evolve with the rapid pace of medical innovation so the focus remains on access. These practical approaches, which directly address benefit design, can be implemented without fundamentally changing the program’s successful competitive structure.
First, when drug companies negotiate discounts and rebates with insurers and pharmacy benefit managers, those savings should be passed directly to Part D beneficiaries. It’s the right thing to do, and will only serve to benefit patients. The Department of Health and Human Services recently proposed a rule in this vein that would be a step in the right direction. This alone, however, will not bring enough relief to seniors.
Second, patients should be given the option of spacing their out-of-pocket costs for specialty medicines over time, instead of burdening them with unreasonably high payments upfront. This would allow seniors to better plan for the cost of their treatments. If utility companies can do this with heating and air conditioning bills, Medicare can do it for medications.
Third, if a physician deems that a particular therapy is most effective for treating an individual’s illness, she or he should be able to request lower cost sharing for the drug even if it isn’t on the insurance plan’s preferred “tier.” Insurers should acknowledge that patients do not respond identically to specific medicines, and long-term savings can be achieved by getting the treatment right the first time.
Fourth, just as Medicare Advantage caps annual out-of-pocket spending for hospital care, laboratory tests, and other services, Part D should do the same thing for spending on medications. It is unjust to saddle seniors with unlimited, uncapped spending merely because they are able to manage their medical condition at home with prescription therapies, rather than through costly medical procedures and hospital care.
An estimated 1.7 million Americans, many of them over age 65, will be diagnosed with cancer this year. Medicare Part D has been an unequivocal success for millions of aging Americans, but it is now falling short in protecting those facing some of the most deadly cancers. As new discoveries are made that can extend the lives of people with cancer, modernizing Medicare Part D isn’t just a matter of public policy. It’s a pathway to hope and the prospect of living life to the fullest.
About 20 million Americans have gained coverage under ObamaCare since it was passed in 2010, but nearly 9 percent — 30 million people — still don’t have health insurance.
All Democrats running for president say they want to provide universal health care coverage to Americans. But they have different ideas about how to get there.
Here are the plans they keep talking about on the campaign trail and what they would do.
Medicare for All
Sponsors: Sen. Bernie Sanders (I-Vt.) has offered a plan in the Senate, and Rep. Pramila Jayapal (D-Wash.) has introduced similar legislation in the House.
Who supports it: Sens. Cory Booker (D-N.J.), Kirsten Gillibrand (D-N.Y.), Kamala Harris (D-Calif.) and Elizabeth Warren (D-Mass.) and Rep. Tulsi Gabbard (D-Hawaii) have all sponsored the Medicare for All bills in the House and Senate.South Bend, Ind., Mayor Pete Buttigieg said he wants to work toward such a system.
What it would do: Of all the plans to expand Medicare, Sanders’s is the most ambitious.
Over a four-year period, it would transform Medicare, the nation’s health care program for those over 65, into a single-payer system that provides comprehensive health care coverage, including dental, vision and long-term care, to all Americans under one plan.
It also would eliminate most other federal health programs, such as Medicaid, but keep the Indian Health Service and the Veterans Health Administration, though those could eventually be eliminated as well.
This would mean an end to private insurance plans as we know them, including those offered by employers and the plans people can buy individually, such as those sold on the ObamaCare marketplaces.
That’s because under this proposal, private insurance companies would actually be banned from selling plans that cover the same services.
This is a sticking point for Democrats, many of whom are wary of getting rid of a multibillion-dollar industry that covers 67 percent of the population.
But that’s precisely the point, says Sanders, who argues that health care costs have skyrocketed because insurance companies are motivated by profits and not patients’ health.
“The current debate over Medicare for All has nothing to do with health care; it has everything to do with greed and profiteering,” Sanders said this week.
Even the 2020 presidential candidates who have signed on to the Sanders bill have waffled on whether such a plan should eliminate private insurance. It’s a point that is likely to come up when the candidates are asked about the plan at debates starting this summer.
Another sticking point is the cost.
Sanders hasn’t said how much his plan would cost, though some estimates put it at around $32 trillion.
A national health care system could be paid for, he said, by reshuffling the money the U.S. currently spends on federal health programs while raising income taxes for the wealthy or creating taxes on employees and employers.
Opponents of the plan typically point to increased taxes as a downside. But Sanders notes that it would eliminate virtually all cost-sharing, including premiums, deductibles and copays.
Medicare for America
Sponsors: Reps. Rosa DeLauro (D-Conn.) and Jan Schakowsky (D-Ill.).
Who supports it: Former Rep. Beto O’Rourke (D-Texas). Gillibrand also has voiced support for making Medicare available to everybody while maintaining private insurance.
What it would do: Medicare for America aims for universal coverage while giving workers the option of keeping their employer-sponsored health plan or switching to a new expanded version of Medicare.
All U.S. residents would be eligible for the plans, but newborns, the uninsured, and anyone receiving coverage through Medicaid, Medicare, ObamaCare or the Children’s Health Insurance Program would automatically be enrolled.
Large employers could continue offering coverage as long as it’s comparable to the new Medicare plans, or they could make contributions to the Medicare plans on behalf of their employees.
“It responds to the fact that so many Americans have said, ‘I like my employer-based insurance. I want to keep it. I like the network I’m in. I like the doctor that I see,” O’Rourke told The Texas Tribune last month.
“It complements what already exists with the need that we have for millions of Americans who do not have insurance and ensures that each of them can enroll in Medicare.”
Unlike Sanders’s proposal, Medicare for America plans would have premiums and deductibles based on income, with the poorest individuals paying the least.
It would also preserve Medicare Advantage, plans managed by private insurance companies, which would be eliminated under Sanders’s bill.
There’s no cost estimate for this legislation, but it would be financed by sunsetting that tax cuts Congress passed in 2017 and by raising taxes on the wealthy and increasing the Medicare payroll tax. State governments would also be required to contribute.
Medicare-X Choice Act
Sponsors: Sens. Michael Bennet (D-Colo.) and Tim Kaine (D-Va.) and Reps. Antonio Delgado (D-N.Y.), John Larson (D-Conn.) and Brian Higgins (D-N.Y.)
Who supports it: O’Rourke, Sen. Amy Klobuchar (D-Minn.), Buttigieg, Harris and Booker
What it would do: This proposal, sponsored by moderate Democrats in the House and Senate, would leave the existing health care system intact and create a public option administered by Medicare, allowing individuals of any age and small businesses to purchase plans that include access to the program’s network of health care providers.
These plans would be made available across the country over a period of four years and would cover ObamaCare’s 10 required benefits, including maternity care and mental health services.
It would also expand access to tax credits that help people buy ObamaCare coverage and would allow those credits to be used for Medicare-X plans while boosting the size of those credits for people with lower incomes.
Kaine and Bennet frame the proposal as more politically feasible than Medicare for All.
“We preserve everything about the existing system, and we just put one additional element into it,” said Kaine, who ran for vice president in 2016.
The plan works, Kaine says, because it’s run by the government and doesn’t have to earn a profit.
“I just think that this is a much more practical way of trying to achieve the objective, which is universal coverage,” Bennet said.
Medicare at 50 Act
Sponsors: Sen. Debbie Stabenow (D-Mich.) and Rep. Brian Higgins (D-N.Y.)
Who supports it: Booker, Harris, Klobuchar and Gillibrand.
What it would do: Stabenow’s bill is likely one of the most politically tenable of all the proposals to expand Medicare.
Under the plan, U.S. citizens between the ages of 50 and 64 would be allowed to buy a Medicare plan.
Like the Kaine and Bennet plan, individuals could use ObamaCare subsidies to purchase plans.
Supporters of the bill say it’s a step toward universal health care.
“I’ve always supported universal health care, but we are not there yet,” said Sen. Tammy Baldwin (D-Wis.), a sponsor of the bill.
“Medicare at 50 is a very bold step in the right direction.”