Center for Medicare Advocacy: The President’s Medicare Executive Order Expands Towards Private Medicare Advantage Over Traditional Medicare

WILLIMANTIC, Connecticut, Oct. 3 -- The Center for Medicare Advocacy issued the following news release:

Today the Trump Administration issued an Executive Order (EO) entitled "Protecting and Improving Medicare for Our Nation's Seniors." Since the President's speech announcing the EO lacked policy specifics, we looked to the administration's telephone press conference to discern the intentions behind the EO. As expressed by Administration officials on the call, the EO is continuing to promote private Medicare Advantage insurance plans over traditional Medicare. This is part of an ongoing drive to privatize the Medicare program.

In outlining some of the provisions of the EO during the press call, Secretary of Health and Human Services Azar stated a goal is to "ensure that, as much as we can, our Fee-for-Service Medicare program is not advantaged or promoted over Medicare Advantage with respect to its administration." Referring to the traditional Medicare program as "fee-for-service," Secretary Azar responded: "So the executive order commissions us to examine all practices, regulations, guidance to just make sure that we're not steering people into Fee-for-Service, as opposed to giving them a genuine choice of Medicare Advantage or Fee-for-Service." [Emphasis added].

He continued: "So we'll be looking at all of those issues: how does the enrollment process work when new people come in; how the annual enrollment process work; are we providing adequate information through the various plan-finder tools to ensure people can make informed choices, make sure there's no financial disincentive to being in MA versus Fee-for-Service. So really, across the board that's -- the executive order is the initiation of the process now of examining all of that [...]"

In fact, the Center for Medicare Advocacy (the Center) has documented that this Administration has been promoting Medicare Advantage over traditional Medicare through various means, including the program's outreach and enrollment materials, marketing policies, and benefits.

Scales Already Tipped in Favor of Medicare Advantage

The Center continues to draw attention to the Medicare Advantage (MA) program's growing imbalance with traditional Medicare. A number of legislative and regulatory policy changes have tipped the scales in favor of MA. For example, coverage expansions such as the ability to provide new supplemental benefits have been advanced in MA, but not in traditional Medicare. In recent years, this has been exacerbated by a concerted effort on the part of the Medicare program to steer beneficiaries toward enrollment in private MA plans rather than providing objective, neutral information about coverage options.

Despite provisions of the Affordable Care Act that reined in excessive overpayments to MA plans, there is still evidence that MA is costing the Medicare program more than traditional Medicare spends per individual, with mixed health outcomes.

At the very least, there must be payment parity between traditional Medicare and private MA plans. As we have stated elsewhere, wasteful spending on MA should be reinvested into the Medicare program to the benefit of all people with Medicare, not just those who choose to enroll in private plans.

The President Should Work to Improve Health Care for All Rather than Attacking Proposals to Expand Coverage

Instead of focusing on policy proposals that would improve people's health care now, the President's speech announcing the EO relied on tired tropes about the threat of "socialism" without a hint of irony relating to the red scare tactics used to try to defeat the original passage of the Medicare program. As noted by the Washington Post's Health 202 in September 2018, "Medicare as it exists today - a government-run service for all elderly Americans - is the closest thing America has to socialized medicine. And there's nothing in Democratic proposals that indicate that expanding it would make the program less available for current recipients."

Further, as noted in today's Health 202, "the president will promise to strengthen Medicare Advantage as a way of improving health-care coverage for millions -- even as his administration refuses to defend the Affordable Care Act in a high-stakes lawsuit in which a ruling is expected any day now."

Only about one-third of Medicare beneficiaries are enrolled in Medicare Advantage plans; the rest choose traditional Medicare. Proposals that only help those enrolled in private MA plans leave behind the vast majority of older adults and those with disabilities who rely on Medicare, while building a path to a private, HMO-like Medicare program. The Center for Medicare Advocacy has developed a Medicare Platform that outlines various proposals that would improve the program for all, including parity between traditional Medicare and Medicare Advantage plans.

As Judith Stein, Executive Director of the Center for Medicare Advocacy, notes, "This Executive Order is designed to bolster the insurance industry by steering beneficiaries into private Medicare Advantage plans, at the expense of most beneficiaries and Medicare's future. If the Administration truly cares about improving access to Medicare and health care, it will work to improve quality coverage for all Medicare beneficiaries, including those in traditional Medicare."