Transparency Should Apply To All Forms Of Medicare Insurance

THE FEDERALIST

In various committee hearings and markups, Congress continues exploring actions to expand transparency for health care consumers. Such measures hold the potential to give patients the information they need to select their health care options wisely, generating competition that can bring down costs.

However, the success of transparency efforts depends upon those measures getting applied evenly and broadly. When it comes to Medicare, that means Congress should ensure seniors have information on all types of insurance policies they can purchase.

Recently, the House Ways and Means Committee marked up several pieces of health-related legislation. Among the bills the committee approved was H.R. 9644, the Medicare Advantage MLR Transparency Act.

“MLR” refers to the medical loss ratio — the percentage of premium dollars spent on delivering health care benefits, as opposed to administrative overhead and profit. Under the reconciliation law Democrats passed in 2010 to “fix” Obamacare, Medicare Advantage and Medicare Part D prescription drug plans already have a minimum requirement for an 85 percent MLR — that is, they may spend no more than 15 cents of every premium dollar on overhead and profits.

While insurers already report their MLR information, they do not widely publicize those data. H.R. 9644 would require public online reporting of MLR data “in a consumer-friendly format,” as part of a package of information Medicare Advantage insurers would be required to disclose. In supporting the proposal, House Ways and Means Committee Chairman Jason Smith, R-Mo., claimed that “seniors and taxpayers deserve to know this information before they hand over their money.”

But the legislation does not apply the new MLR transparency requirements to stand-alone Medicare Part D plans or to Medigap (i.e., Medicare supplemental) insurance. Many seniors enrolled in traditional Medicare (as opposed to Medicare Advantage) purchase Medigap plans to offset the cost of expenses that traditional Medicare does not cover.

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