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Methodology and Analysis of the Center for American Progress’s Medicare Extra Policy Proposal

Summary

The Center for American Progress (CAP) commissioned Avalere to evaluate ‘Medicare Extra’ as a package of reform polices implemented and phased in over time across the US healthcare system.

The overarching policy involves transitioning different segments of the US population (e.g. Medicare beneficiaries, Medicaid enrollees, private insurance enrollees) into eligibility for a new federal healthcare program (NFHP). Key characteristics of the NFHP involve income-based premiums and cost sharing, a new regulatory structure for reimbursing medical providers and products, new coverage options for employers/employees and Medicare beneficiaries, auto-enrollment for newborns, and the partial replacement of state Medicaid programs.

In addition to the establishment of the NFHP, the CAP proposal includes additional policies that alter benefits, payments, and federal funding for the current healthcare system. Many of these policies impact the current Medicare program, including Medicare FFS benefit redesign, a Part D MOOP, and competitive bidding in Medicare Advantage. Other polices include: a failsafe public option for the ACA Exchange markets, drug and hospital pricing policies, and new maintenance-of-effort payments required by states to the federal government in place of their state Medicaid spending.

Key Scoring Results

Under the policy, the analysis found that CAP’s Medicare Extra policy would increase federal spending by $2.8 trillion over the 10-year budget scoring window, from 2022-2031. Under this policy, approximately 35 million uninsured individuals are projected to achieve coverage under Medicare Extra.
While the proposal would increase federal spending, total national healthcare expenditures in the United States are projected to be 4% lower than under current law by 2031, reducing total healthcare spending in the United States by approximately $300 billion in that year compared to baseline levels.
By the end of the scoring window, 199 million individuals would receive their coverage through Medicare Extra. The majority of these individuals would be enrolled from the ranks of Medicaid (71M), the Uninsured (35M), employer sponsored insurance (33M), and the individual market (12M). Nearly 121M individuals would continue to receive their health insurance coverage through their employers.

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