Medicare For All? CMS Chief Warns Program Has Enough Problems Already

The Trump administration's top Medicare official Tuesday slammed the federal health program as full of issues that hinder choose to beneficiaries, increase costs for taxpayers and escalate fraud and abuse.

Seema Verma, administrator from the Centers for Medicare & Medicaid Services (CMS), said those troubles underscore why she opposes calls by many people Democrats for dramatically widening eligibility for Medicare, now serving 60 million seniors and individuals with disabilities, to many millions others.

“We just take a look at a number of Medicare's major problems to understand it's a bad idea,” Verma told health insurance executives at a meeting in Washington.

CMS lacks the authority from Congress to operate this program effectively, Verma said, which means it often pays higher-than-necessary rates to doctors and hospitals and can't take steps utilized by private insurers to manage costs.

“We face tremendous barriers to supporting and bringing innovation to Medicare, also it literally takes an act of Congress to add new types of benefits for the Medicare population,” she added.

Since Medicare was approved in 1965, Congress has held power over eligibility and benefits – largely to manage spending. Which has meant efforts to expand services could possibly get weighed down by partisan politics and swayed by lobbying groups, which significantly delay changes. One example: Congress didn't give a pharmaceutical help to Medicare until 2003 – decades after drugs became a mainstay in most treatments.

Advocates for seniors have required adding vision and dental benefits for many years, however the proposals have gotten little traction because of cost concerns.

Another problem, based on Verma, is that her agency reviews under 0.2 percent of the a lot more than 1 billion claims that Medicare receives from providers. “That is ridiculously low,” she said.

Verma also lamented the traditional Medicare program’s limited capability to require doctors and hospitals to get prior authorization in the authorities before performing certain procedures. That process – which has been routine for many years in the private sector – can result in higher improper payments to doctors and more fraud and abuse, she said.

Jonathan Oberlander, a professor in the department of health policy and management at the University of North Carolina-Chapel Hill, agreed with Verma that “Medicare is not always nimble, specifically in adjusting benefits,” and officials have long complained that Congress micromanages the program. Still, he added, “with a course as large and important to Americans as Medicare, it's perfectly right for Congress to weigh in on the inclusion of new benefits, especially since taxpayers will bear the expense of these changes.”

Verma for months has spoken out from the “Medicare-for-all” proposals pushed by Sen. Bernie Sanders (I-Vt.) and a growing chorus of Democrats. But her 35-minute address towards the meeting from the trade group America's Medical health insurance Plans marked the first time she listed the litany of problems with Medicare, which she has run since March 2021.

Proponents of “Medicare-for-all” are reacting to problems brought on by the Affordable Care Act, she said, and should know expanding Medicare will worsen the program's existing challenges of controlling costs and improving care.

“But their option would be literally to complete more of what's no longer working,” she added. “It's like the man who has a pounding headache, who then requires a hammer to his head to make it go away.”

Verma's comments, however, overlooked the key leadership role that Medicare plays within the health sector, that is emulated by private insurers, Oberlander said.

“In payment reform, Medicare has a record of being a leader and innovator,” he explained. “For all their supposed advantages, private insurers pay much higher prices than Medicare does for medical services. Verma ignores the truth that Medicare's price regulation has produced substantial savings.”

Although Verma heavily criticized the standard Medicare program, which covers two-thirds of enrollees, she boasted about how exactly she and the Trump administration were running Medicare Advantage, the fast-growing alternative program that's operated by private insurers such as UnitedHealthcare and Humana.

More than 20 million Medicare beneficiaries are enrolled in efforts, which often cost members under traditional Medicare and also have additional benefits. However they generally require members to make use of only the plan's network of providers.

“Medicare Advantage represents value for the beneficiaries and taxpayers,” Verma said.

She touted a 2021 CMS initiative that will the very first time permit the Advantage intends to offer supplemental health advantages that go beyond traditional dental and health services. These include adult daycare, in home support services and meals.

It is “one of the most significant changes designed to the Medicare program” and “will possess a major impact” on improving health for plan members, she said.

But the private plans took a cautious approach to adding those benefits.

About 270 Medicare Advantage plans – or less than 10 % from the total – decided to offer these services next year.

At the AHIP conference on Monday, medical health insurance executives said they were still trying to puzzle out which of the members would definitely benefit from the new offerings.

“We are operating inside a vacuum of excellent evidence,” said William Shrank, chief medical officer of UPMC Health Plan in Pittsburgh. Nonetheless, Shrank said the opportunity to offer new benefits going beyond just health care may help beneficiaries stay out of the hospital and lead healthier lives.

Verma did not mention a report last month through the Department of Health insurance and Human Services' inspector general that found many Advantage plans were improperly denying claims from patients and doctors.

Administration critics were quick to notice that omission.

“Her intemperate attack on traditional Medicare – on which two-thirds of beneficiaries rely and which millions value so highly” – is “striking,” said Sara Rosenbaum, a professor of health law and policy at George Washington University. As is “her utter failure to acknowledge the intense challenges for making Medicare Advantage operate fairly, which her very own inspector general underscored.”