JAMA: Traditional Medicare Is, In Fact, The Failure

What You Should Know: 

– A new article published in JAMA Internal Medicine reignites the debate about Medicare Advantage and traditional Medicare. 

– Dr. Sachin H. Jain, CEO of SCAN Group and SCAN Health Plan, argues in favor of Medicare Advantage, while Drs. Adam Gaffney, David Himmelstein, and Steffie Woolhandler advocate for traditional Medicare.

Traditional Medicare: Lower Costs, Fewer Benefits

Traditional Medicare offers beneficiaries lower premiums, but it comes with significant out-of-pocket costs. Beneficiaries face a $1,500 deductible for inpatient care, monthly Part B premiums, and coinsurance for both outpatient services and prescription drugs. These costs often lead beneficiaries to purchase additional coverage like Part D prescription drug plans and supplemental policies, raising overall healthcare costs.

Medicare Advantage: More Benefits, Predictable Costs

Dr. Jain argues that Medicare Advantage plans fulfill the original vision of Medicare by providing:

  • Enhanced benefits: These include dental, vision, and audiology care, not covered by traditional Medicare.
  • Cost predictability: Medicare Advantage plans offer a capped out-of-pocket maximum, limiting patients’ financial risk.
  • Access to quality care: Dr. Jain argues that Medicare Advantage plans deliver high-quality healthcare.

Nearly Half of Beneficiaries Choose Advantage Plans

These advantages are why nearly half of Medicare beneficiaries choose Medicare Advantage plans. However, Dr. Jain acknowledges room for improvement, particularly in areas like:

  • Risk adjustment refinement: This ensures plans receive appropriate funding to care for sicker patients.
  • Standardization of benefits: This would allow for easier comparison between plans.
  • Multi-year enrollment programs: This could promote continuity of care.

The Debate Continues

Drs. Gaffney, Himmelstein, and Woolhandler, however, believe Medicare Advantage is a “failed experiment.” Their perspective and Dr. Jain’s call for improvement highlight the ongoing debate about how to best deliver affordable, high-quality healthcare to our aging population.

“To those driving the narrative that Medicare Advantage is a ‘failed experiment,’ I challenge them to consider the notion that traditional Medicare is actually the true failure,” said Dr. Jain. “We should be questioning the fact that after contributing to Medicare over the course of their entire working lives, at age 65 beneficiaries earn the right to pay thousands of dollars more in out-of-pocket costs for care that doesn’t meet their needs. Despite many efforts, traditional Medicare is not delivering on its promises,” said Dr. Jain. “The government’s clunky and prodding approach to innovating and modernizing traditional Medicare—mostly requiring congressional action— comes at the expense of older Americans. Medicare Advantage plans have stepped in and successfully created broad-based benefits that meet beneficiaries’ needs and provide them with economic security.”