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Medicare X could cost hospitals $800 billion over 10 years and disrupt health insurance market, study says

March 13, 2019 / Susan Morse, Senior Editor

The proposed Medicare-X Choice Act could cost hospitals $800 billion over 10 years and significantly disrupt the health insurance exchanges, according to a study done on behalf of the American Hospital Association and the Federation of American Hospitals.

The Medicare-X Choice Act would build on the Medicare framework to establish a public insurance plan offered on the individual and small business health exchanges, allowing consumers to choose an existing private insurance or a government-run health plan.

It would use Medicare’s network of doctors, require similar reimbursement rates, and guarantee the essential health benefits established in the Affordable Care Act.  It would also ensure access to prescription drugs by offering prices negotiated in conjunction with the Medicare Part D program.

IMPACT

Medicare X would be disruptive to both the individual non-group and employer-sponsored health insurance markets, the study by KNG Health Consulting said. The bill could reduce hospital payments by nearly $800 billion over 10 years.

Presumably this is due to the lower reimbursement rate hospitals receive from Medicare than private insurance. Providers are already absorbing more than $200 billion in Medicare cuts under new public plans, the study said.

The study further finds the bill would result in only a modest increase in the number of consumers who would be insured, compared to how many people would gain coverage under the current framework.

Most Americans are satisfied with their current coverage, America’s Health Insurance Plans said. An estimated 180 million are covered through their jobs, 22 million through Medicare Advantage, 55 million through Medicaid managed care and 20 million who buy their own coverage.

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Chris J. Stewart

Chris currently serves as Chief Operating Officer at Ortho Spine Partners. Prior to that, he was the assistant vice president and business unit leader of Medical Device Management for HealthTrust.

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