Medicare For All & Reference Based Pricing

Since Medicare For All is only a few elections away some employers are asking “Why wait? Let’s do it!

By Bill Rusteberg

Many believe Medicare for all is just a few elections away (Single Payer System Is One Election Away). In the meantime most employers continue to struggle with higher and higher health care costs. Most cling to the failed managed care method of controlling costs by accessing PPO networks which are actually cost drivers, not cost savers. But most don’t know that.

Those that do know have moved to Reference Based Pricing strategies. This simple method of reducing costs as much as 40-50% above and beyond PPO pricing is tied to claim bench marking off Medicare allowable charges.

Sensitive to provider push back (no one likes to be paid less) employers and their Reference Based Pricing vendors usually set reimbursement rates at 140-150% of Medicare. Some, especially those in Texas, have traditionally set the rate at 120% of Medicare. (Those remaining on PPO networks pay two, three, four or more times that amount).

But since Medicare For All is only a few elections away, (The Elephant In The Room) some employers are asking “Why should I wait? Let’s incorporate this now for our employee benefit plan! If the government supports it, and since not a single politician wants to eliminate Medicare ever, this makes perfect sense. Besides, California is considering a bill that would require all plans to set claim reimbursement rates on Medicare bench marking.” (Will California Criminalize PPOs?)

A 100% benefit plan paying 100% of Medicare allowable rates would provide significant savings (Renting Medicare’s Provider Network). Any out-of-pocket expense would be the responsibility of the patient. Patients would actually control their own out-of-pocket expenses by selecting providers who are willing to accept Medicare reimbursement rates as most are already doing for other patients.

If plan members complain, the employer can simply remind them almost all medical caregivers accept Medicare anyway and it’s not fair to be charged more than others!

Medicare For All……………………….Why Wait?

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