Medicare X legislation continues to gain support in Congress and researchers

The public health insurance option, dubbed Medicare X, continues to gain support both in Congress and among researchers. This is good news for small employers, since the option would give them a way to help employees get quality coverage with fewer barriers to utilization.

The latest research boost for Medicare X comes from the Urban Institute and its option evaluation. The study, “Assessing the Access and Equity Concerns in a Medicare-X-Style Public Option Reform,” follows on a 2022 report indicating that millions of underinsured or noninsured Americans would benefit from Medicare X.

The new study focused on underserved segments of the adult population, particularly those considered to be a greater risk due to lack of access to health care, either because of their location in underserved markets or an inability to pay for quality coverage.

The legislation’s impact on access for Blacks and Hispanics in particular found that hospital concerns that they will lose significant revenue from these groups with Medicare X coverage is largely unfounded. The loss in revenue, as estimated in the report, is miniscule: on average, 1.4%, and as low as .5% in some regions. Other highlights include:

• Black non-Hispanic and Hispanic people would be less likely to be directly affected by the public option compared with white non-Hispanic people. Asians and Pacific Islanders would be the groups most affected.
• The introduction of a Medicare X public option would affect provider payment rates for 12.3% of the population, or 41.8 million people. The reform would not change the hospital payment rates of roughly 88% of people.
• On average, household health care spending for previously insured people affected by the public option would drop by 4.8 percentage points.
• The introduction of a Medicare X public option would affect provider payment rates for 12.3% of the population, or 41.8 million people. The reform would not change the hospital payment rates of roughly 88% of people.

“Overall, the analysis finds little indication that Black non-Hispanic or Hispanic populations affected by a public option would have their access to hospital care affected differently by a public option than the white non-Hispanic population,” the report states.

For small employers, Medicare X would represent a new and viable option for employees to access true heath insurance, says Fred Blavin, principal research associate with the Urban Institute.

Blavin says that the report indicates that Medicare X would stimulate greater competition for clients among small group insurers, thus lowering the cost to the insured. Premiums and related costs to the insured would be reduced, thus clearly benefiting those employed by smaller companies.

“It would reduce the financial burden on those people, with an average annual reduction of $500 a year in premium and out-of-pocket spending,” he says. “Everyone could benefit from increased competition.”

Politically, Blavin sees an emerging path forward for the legislation. He notes that it was included in the original Patient Protection and Affordable Care Act but was excised late in the debate. But it has continued to gather bipartisan political support due to its proven (by research) cost-saving potential. Now, this report should allay provider fears about massive lost revenue.

Related: Medicare customers satisfied with coverage, but worry about out-of-pocket costs

“There is still opposition to the legislation. But it is headed in the right direction,” he says.

The legislation was introduced in the Senate by Senators Tim Kaine and Michael Bennet in the Senate and must be approved by both chambers.