October 4, 2019

Trump issues executive order to expand private Medicare plans

Daily Briefing

    President Trump on Thursday issued an executive order that aims to expand private Medicare Advantage (MA) plans and implement other Medicare reforms.

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    Trump announced the order during a speech at a retire community in Florida, where he also detailed "key themes" of his re-election campaign. As one of those themes, Trump said he would work to defend private health coverage, offering a contrast to Democratic presidential candidates' calls for transitioning the United States to a single-payer health system.

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    Trump also said he would work to protect the Medicare program, saying Democratic candidates' so-called "Medicare-for-All" proposals could harm seniors' current coverage. "Medicare is under threat like never before," Trump said, adding, "Almost every major Democrat in Washington has backed a massive government health care takeover that would obliterate Medicare."

    Executive order details

    Trump's executive order, titled "Protecting and Improving Medicare for Our Nation's Seniors," aims to bolster MA plans, which have become increasingly popular. Enrollment in MA plans has grown to more than 20 million people, encompassing more than one-third of total Medicare beneficiaries.

    Specifically, the executive order directs the HHS secretary to, within one year, to propose a regulation to and take administrative actions that would alter MA benefit structures and plan designs. For example, the order suggests the steps could improve access to Medicare Medical Savings Accounts, supplemental benefits, and telehealth services.

    The order also calls on HHS to implement a payment model that adjusts MA supplemental benefits to allow beneficiaries "to share more directly in the savings from the program, including through cash or monetary rebates, thus creating more incentives to seek high-value care."

    The executive order also directs the HHS secretary to consult with the chair of the White House's Council of Economic Advisers and, within 180 days, submit to the president a report detailing ways to change Medicare FFS payments so they more closely align with the prices paid by MA and commercial health plans "to encourage more robust price competition, and otherwise to inject market pricing into Medicare FFS reimbursement."

    In addition, the order directs the HHS secretary to, within one year, propose regulations to improve beneficiaries' access to health care providers and plans by updating network adequacy requirements for MA plans in a manner that accounts for:

    • Available telehealth services or "other innovative technologies" that provide "enhanced access to health outcomes;" and
    • The competitiveness of the health insurance markets in the states where the plans are sold.

    The executive order also includes other provisions aiming to:

    • Better inform health care providers of practice patterns that might pose unnecessary risks to patients, are outliers, or that fall outside of recommended care standards;
    • Ensure site neutrality;
    • Eliminate waste, fraud, and abuse in Medicare;
    • Encourage Medicare to reimburse physicians and other types of clinicians based on the services provided, not their job titles;
    • Improve Medicare beneficiaries' access to data on care costs and quality;
    • Reduce administrative burdens on health care providers by streamlining certain billing, licensing, and payment requirements;
    • Reduce the amount of time between when FDA approves a drug and Medicare issues a coverage determination for the treatment; and
    • Update Medicare's Value-Based Insurance Design payment model "to remove any disincentives for MA plans to cover items and services that make use of new technologies that are not covered by FFS Medicare when those items and services can save money and improve the quality of care."

    Comments

    HHS Secretary Alex Azar said the executive order "direct[s] HHS to take a number of specific, significant steps that will meaningfully improve the financing of Medicare, advance the care American seniors receive from their doctors, and improve the health they enjoy." He continued, "Sixty million Americans are on traditional Medicare or [MA]. They like what they have, so [Trump] is going to protect it."

    Lindsay Bealor Greenleaf, director of policy at the global health care consulting firm ADVI Health, said, "The [e]xecutive [o]rder will improve upon privately-run [MA] plans, and provide seniors with more benefit choices."

    But Gerard Anderson, professor of health policy and management at Johns Hopkins University, said the changes proposed in the executive order are incremental and could have been more detailed, such as proposing that Medicare "offe[r] dental and vision benefits which would bring Medicare up to private sector benefits."

    Loren Adler, associate director of the USC-Brookings Schaeffer Initiative for Health Policy, said the executive order seems to be directing HHS to examine transitioning Medicare toward a premium-support model, in which Medicare is competing with private health plans.

    Topher Spiro, VP for health policy and a senior fellow for economic policy the Center for American Progress, had a similar view, writing on Twitter that the order amounts to a "fancy way of saying Medicare privatization."

    Adler in a tweet also expressed concern that the order could lead to higher Medicare spending. "I hope it isn't the intent, but this reads like the goal of Trump's new [executive order] is to make Medicare much, much more expensive by providing a huge windfall to hospitals—by partially tying Medicare provider payment to what commercial insurance pays," Adler wrote. However, he also noted that the order's " intent is just to apply private insurance prices to Medicare when they're lower, which [he] hope[s] is the case."

    America's Health Insurance Plans applauded the executive order. The group in a statement said the order would "offer more flexibility that will allow [MA] plans to develop more coverage choices for seniors and people with disabilities" (Roubein, Politico, 10/3; Executive Order, 10/3; Subramanian et al., USA Today, 10/3; Simmons-Duffin, "Shots," NPR, 10/3; Lovelace, CNBC, 10/3; Armour, Wall Street Journal, 10/3; Hirschfeld, Fortune, 10/3; Stein, Inside Health Policy, 10/3 [subscription required]; Adler tweet, 10/3; AHIP statement, 10/3).

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