Medicarried Away?


March 4, 2020

Photo by Hoag Levins

As the country continues to debate the best way to reform our health care system, we explore a blueprint for universal coverage that looks a lot different from the Medicare for All proposals we’ve heard most about.  (Recorded in front of a live audience at the University of Pennsylvania on Feb. 21, 2020.)

Listen to the full episode below, read the transcript or scroll down for more information and pictures from the live event.

Tradeoffs Live!

This episode was recorded in front of a live audience at the “Medicare for All and Beyond” conference put on by the Leonard Davis Institute of Health Economics at the University of Pennsylvania. It was inspired by a November 2019 paper by Mark Shepard, Kate Baicker and Jonathan Skinner that explored a potentially major reform to how Medicare operates.

The Idea: A Less Generous, Higher Value Medicare

The version of Medicare proposed by Shepard, Baicker and Skinner would cover fewer services than the current system and introduce cost effectiveness measures that would focus coverage on so-called high value care. It would not cover services that are determined to not return enough health benefit relative to their cost. (This is not the same as expensive versus cheap care. Some expensive care is considered high value, and some cheap care is seen as low value.)

This kind of cost effectiveness system is currently banned in Medicare but serves as the bedrock of public health programs in other countries including the United Kingdom, France, Germany, Canada and others. Like those countries, the authors propose allowing people to “top up” the more basic public insurance with supplemental private insurance that could cover additional treatments and services not covered by the public program.

In theory, the money the government saves by offering a less generous public plan could be used to support other societal interests such as housing, education and food assistance. The authors point to research showing that lower income people often choose to spend less on health care when given the option. They say this is evidence that many low-income people would rather have the government spend less on health care and more on other social safety net services.

While the paper deals strictly with reforming Medicare, the authors note that the same principles could be applied to a universal public insurance plan, similar to those in the countries mentioned above.

The Tradeoffs

Moving to a less generous Medicare plan and allowing people to “top up” with private insurance would save the federal government money on health care. It would also reinforce the reality that people with more money get better health care.

The Medicare savings could be put toward other social services, but that will be a political decision. The savings could also result in tax cuts, which would likely benefit higher income individuals, leaving those with lower incomes with less health care and no additional social services.

Establishing cost effectiveness rules for Medicare could push the entire U.S. health system toward a more value-based approach. But some entity will need to be in charge of determining what services are high enough value to be covered, and that could be difficult and controversial to implement.

These tradeoffs would be amplified if this version of Medicare was used as the template for a universal coverage plan.

A Deeper Dive With Kate Baicker

In our live show, we looked at the idea of a more basic Medicare plan as a potential blueprint for a version of universal coverage that is different than the Medicare for All we’ve been hearing about. In this extended conversation with University of Chicago economist Kate Baicker, we dive deeper into the core of Baicker and her co-authors’ proposal: a reimagining of Medicare. You can listen below or read the transcript.

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Episode Resources

Medicare Reform Research

Does One Medicare Fit All? The Economics of Uniform Health Insurance Benefits; Mark Shephard, Kate Baicker and Jonathan Skinner; National Bureau of Economic Research; 2019

Economic Principles for Medicare Reform, Amitabh Chandra and Craig Garthwaite, The ANNALS of the American Academy of Political and Social Science, 2019

“Top Up” Programs Around the World

“The Best Health Care System in the World: Which One Would You Pick?”, Aaron E. Carroll and Austin Frakt, The New York Times, 2017

Medicare for All

“We need a national conversation about our health care priorities,” Amitabh Chandra and Kate Baicker, The Boston Globe, 2019

The Town the Ballpark Is In, Tradeoffs, 2019

“Would ‘Medicare for All’ really save money?”, Jason Millman, POLITICO, 2019

Episode Credits

Guests: Kate Baicker, PhD, University of Chicago Harris School of Public Policy
Amitabh Chandra, PhD, Harvard Kennedy School of Government and Harvard Business School
Julia Lynch, PhD, University of Pennsylvania

Original music composed by Ty Citerman; additional music by Bacon

This episode was reported by Ryan Levi. It was produced and mixed by Andrew Parrella. It was produced for the web by Ryan Levi.

Additional thanks to:
Hilary Nelson, Julie Sochalski, Utsha Khatri, Kirsten Manges, Heather Klusaritz, Melissa Ostroff, Traci Chupik, Rachel Werner, Neal Swisher, Sam Katzman, Mike Bernard, Emily Goldman, Mark Shepard, the Tradeoffs Advisory Board…

…and our stellar staff!