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August 15, 2019

Are big employers on board with 'Medicare for All'?

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    Just over half of large U.S. employers support expanding Medicare coverage to adults under 65 in some form, according to the National Business Group on Health's (NBGH) latest annual survey.

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    A total of 147 large employers, which cover more than 15.6 million employees and their dependents, participated in NBGH's survey.

    Large employers broadly support Medicare expansion but have reservations

    According to the survey, large employers have mixed opinions on proposals to expand Medicare coverage, with about 45% saying they opposed expanding Medicare. However, 55% of respondents support expanding the program to more adults under 65. The 55% represents the total share of respondents who said they support expanding Medicare eligibility to certain age groups. Specifically:

    • 23% of respondents said Medicare should be expanded only to adults ages 60-64 only;
    • 9% of respondents said Medicare should be expanded only to adults ages 55-64 only; and
    • 23% of respondents said Medicare should be expanded only to adults ages 50-64.

    The survey also asked about so-called "Medicare-for-all" proposals. The survey found a majority of respondents believe Medicare for all would reduce the number of uninsured U.S. residents. However, respondents still have reservations about such plans. For example, the survey showed:

    • 81% of respondents said Medicare for all would increase tax rates;
    • 69% of respondents said Medicare for all would reduce health care delivery innovation;
    • 57% of respondents said Medicare for all would increase U.S. health care costs; and
    • 56% of respondents said Medicare for all would reduce health care quality.

    Brian Marcotte, chief executive of the NBGH, partly attributed employers' concerns to the "lack of details on who would be eligible." He said, "Will Medicare eligibility be limited to uninsured people above a certain age or is expansion intended to also be offered to employees who have coverage through their employer? If it's the latter, many employers would be concerned about adverse selection given Medicare reimbursement to providers is so much lower than private insurance. Second, what will the age threshold be on eligibility?"

    Large employers consider solutions for rising health care costs

    In addition, the survey showed large employers saw health care costs rise slowly, at a median rate of 3.6%, in 2018. However, employers expect their health care costs to continue to grow at a median rate of 5% in 2019.

    Ellen Kelsay, the NBGH's chief strategy officer, said, "While that on the surface is a good indicator, it is still alarming, because it's higher than wages, it is higher than inflation, and it's increasing at an unsustainable rate over time."

    Overall, employers expect their health care costs, including premiums and out-of-pocket costs, will reach $14,642 in 2019 and $15,375 in 2020. Employers will pay about 70%, with employees paying the rest.

    In response to the rising health care costs, large employers indicated they are planning to implement a number of health care initiatives in 2020. For example, the survey showed:

    • 51% of respondents are implementing more virtual care options for employees;
    • 39% of respondents are focusing their strategy on high-cost claims;
    • 26% of respondents are expanding centers of excellence to include cancer, infertility, and other conditions;
    • 26% of respondents are implementing engagement platforms to aggregate point solutions and personalize communications for employees;
    • 25% of respondents are targeting specialty pharmacy management;
    • 21% of respondents are implementing a high-touch concierge or navigation;
    • 17% of respondents are implementing accountable care organizations in select markets or high-performance networks;
    • 11% of respondents are eliminating out-of-network coverage for select services;
    • 6% of respondents are implementing point-of-sale rebates in pharmacy benefit; and
    • 2% of respondents are moving to fully replace a high-deductible health plan.

    In terms of primary care, the survey showed:

    • 34% of respondents will provide employees with primary care options on-site or at local health centers in 2020;
    • 24% of providers will steer their employees to physician-based ACOs or high-performance networks;
    • 20% of respondents will provide employees with virtual primary care services beyond telehealth in 2020;
    • 14% of respondents will offer employees patient-centered medical homes in 2020; and
    • 9% of respondents will directly contract with primary care models in select markets in 2020.

    Further, the survey showed the share of large employers exclusively providing employees with a high-deductible health plan attached to a health savings account is expected to decrease in 2020. In particular, the survey showed 25% of respondents said they will offer their employees only a HDHP with an HSA in 2020—down from 30% in 2019 and 39% in 2018.

    Kelsay said enrollment in such plans remains high, "but it's no longer becoming the mainstay to have them be the sole plan design offering." Kelsay said employers are beginning to shift away from HDHPs because employees are asking for more options and HDHPs have not resulted in employees becoming more informed health care shoppers as once predicted (Japsen, Forbes, 8/13; Owens, "Vitals," Axios, 8/14; Livingston, Modern Healthcare, 8/13; National Business Group on Health survey, accessed 8/14).

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