March 5, 2018
GOP’s proposed Medicare voucher program would lead to demise of the system
By Max Richtman
A request for public comment from the Centers for Medicare and Medicaid Services (CMS) has caught the eye of a group of Democratic Senators, alarmed about its implications for the future of Medicare.
In February, 15 Senators sent a letter to CMS Administrator Seema Verma expressing concern over a Fall, 2017 Request for Information (RFI) regarding a “new direction” for Medicare’s Innovation Center — and the agency’s subsequent failure to make public the more than 1,000 comments it received.
At the heart of the Senator’s concerns is ambiguous language in the RFI that suggests a shift toward converting Medicare into a voucher program, which would, “fundamentally restructure the guaranteed benefit traditional Medicare provides to older adults and people with disabilities.”
The Senator’s concerns are well-founded, since Republicans in Congress (most prominently, Speaker Paul Ryan) have long-dreamed of privatizing Medicare by turning it into a voucher system — something that we and other senior organizations adamantly oppose.
Under the GOP’s voucher system, private plans could tailor their benefits to attract the youngest and healthiest seniors, leaving traditional Medicare with older and sicker beneficiaries.
Their higher health care costs would lead to higher premiums that seniors would be unable or unwilling to pay, resulting in a death spiral for traditional Medicare.
This latest action is part of an ideological tilt to the right by CMS under Verma’s leadership — with subversion of traditional Medicare as one of the apparent aims.
The agency has demonstrated a bias toward private Medicare Advantage plans over traditional Medicare.
In the case of the implicit shift toward privatizing Medicare, the 15 Senators suggest that CMS may be breaking the law.
“We believe you are violating statutory requirements to safeguard older adults and people with disabilities from paying onerous out-of-pocket costs and going without needed health care,” says their letter to Verma.
Max Richtman is president and CEO of the National Committee to Preserve Social Security and Medicare
Centers for Medicare & Medicaid Services: Innovation Center New Direction
Through this informal Request for Information (RFI) the CMS Innovation Center (Innovation Center) is seeking your feedback on a new direction to promote patient-centered care and test market-driven reforms that empower beneficiaries as consumers, provide price transparency, increase choices and competition to drive quality, reduce costs, and improve outcomes.
II. Provisions of this RFI
B. Potential Models
2. Consumer-Directed Care & Market-Based Innovation Models
CMS believes beneficiaries should be empowered as consumers to drive change in the health system through their choices. Consumer-directed care models could empower Medicare, Medicaid, and CHIP beneficiaries to make choices from among competitors in a market-driven healthcare system. To better inform consumers about the cost and quality implications of different choices, CMS may develop models to facilitate and encourage price and quality transparency, including the compilation, analysis, and release of cost data and quality metrics that inform beneficiaries about their choices. CMS will consider new options for beneficiaries to promote consumerism and transparency. For example, beneficiaries could choose to participate in arrangements that would allow them to keep some of the savings when they choose a lower-cost option, or that incentivize them to achieve better health. Models that we are considering testing include allowing Medicare beneficiaries to contract directly with healthcare providers, having providers propose prices to inform beneficiary choices and transparency, offering bundled payments for full episodes of care with groups of providers bidding on the payment amount, and launching preferred provider networks.
5. Medicare Advantage (MA) Innovation Models
CMS wants to work with Medicare Advantage (MA) plans to drive innovation, better quality and outcomes, and lower costs. CMS seeks to provide MA plans the flexibility to innovate and achieve better outcomes. CMS is currently implementing an MA plan model, the Medicare Advantage Value-Based Insurance Design (VBID) model, that provides benefit design flexibility to incentivize beneficiaries to choose high-value services; but this model could be modified to provide more flexibility to MA plans and potentially add additional states. More generally, CMS is interested in more models in the MA plan space and regulatory flexibility as necessary for purposes of testing such models. CMS is potentially interested in a demonstration in Medicare Advantage that incentivizes MA plans to compete for beneficiaries, including those beneficiaries currently in Medicare fee-for-service (FFS), based on quality and cost in a transparent manner. CMS is also interested in what additional flexibilities are needed regarding supplemental benefits that could be included to increase choice, improve care quality, and reduce cost. Additionally, CMS seeks comments on what options might exist beyond FFS and MA for paying for care delivery that incorporate price sensitivity and a consumer driven or directed focus and might be tested as alternatives to FFS and MA.
United States Senate
February 22, 2018
Letter to Ms. Seema Verma, Administrator, CMS
We are writing to express our continued opposition to the concepts unveiled and the process used in a Request for Information (RFI) regarding "a new direction" for Center for Medicare and Medicaid Innovation (Innovation Center). ...we continue to urge you to provide clarity on the specific model types under consideration.
In the RFI, CMS appeared to seek input on a possible model to restructure Medicare through a premium support or voucher program. We interpreted the RFI to mean that CMS is considering models that would fundamentally restructure the guaranteed benefit traditional Medicare provides to older adults and people with disabilities. Other Members of Congress, select journalists as well as patient and consumer advocates have expressed a similar interpretation and voiced concerns about the Innovation Center's intentions.
While we understand that the RFI does not explicitly mention the terms 'premium support' or 'voucher,' the ambiguity of the proposal allows for a variety of interpretations... Absent further clarification, we do not believe Members of Congress, diverse stakeholders in the health community, and the public were provided a sufficient opportunity to comment on the model concepts outlined in the RFI.
Our concern is compounded by the fact that the proposals under consideration may not allow for Medicare beneficiaries to maintain choice and that beneficiaries may not have the ability to opt out of Innovation Center models.
Additionally, we remain troubled by the Innovation Center's plans to develop and implement the payment model described as "...allowing Medicare beneficiaries to contract directly with healthcare providers." We believe you are violating statutory requirements to safeguard older adults and people with disabilities from paying onerous out-of-pocket costs and going without needed care.
Again, we urge you to publicly post RFI comments instead of obfuscating regular process in order to withhold unfavorable comments from public view or decide against responding to certain comments.
Signed, Senators Casey, Nelson, Brown, Whitehouse, Gillibrand, Market, Donnelly, Shaheen, Reed, Warren, Blumenthal, King, Cardin, Menendez, and Smith
Comment by Don McCanne
Without waiting for Congress to act, the Trump administration is moving forward with policies to shift government health programs to the private sector. The conservatives have long desired to privatize Medicare through premium support (vouchers), and it appears that they have devised a deceptive means of sneaking it in through this Request for Information. We need to watch this process closely, even though it is taking place behind closed doors, lest we find that it is published in the Federal Register and becomes the regulatory law of the land by administrative fiat.