A closer look at the evolution of Medicare Advantage demonstrates that the private sector has proven to be a remarkable laboratory for innovation and progress in our health system’s core evolution—to align the payment and care delivery system with value and the outcomes we care about most for America’s seniors.

Lawmakers are trying to set aside their irreconcilable differences over the Obama-era Affordable Care Act and work to reach bipartisan agreement on a more immediate health care issue, lowering costs for people who already have coverage.

Returning from their Fourth of July recess, the Senate and House are pushing to end surprise medical bills, curb high prices for medicines, and limit prescription copays for people with Medicare.

“Specifically, we are concerned about proposals for open-ended arbitration, which have been floated as a solution to the problem. If arbitration appears innocuous, it is to a large extent because it is not transparent. Experience suggests that arbitration would be cumbersome to deploy, and highly favorable to those health care providers who charge high prices today. If Congress were to endorse arbitration, it could potentially open the door to a system quite unintended – establishing an inflationary dynamic that accommodates and encourages the rapid growth of costs.”

AEI economist Benedic N. Ippolito testified before the Senate HELP Committee on the Lower Health Care Costs Act. Ippolito applauded the bipartisan effort to “meaningfully increase competition and transparency in health care markets…lowering costs would also improve access to health care.”

Senate HELP Committee leaders Wednesday unveiled their wide-ranging bill to address health care costs including “surprise” medical bills. [While surprise medical bills are a serious problem and the goal is laudable, Congress has tried in the past to address this issue, leading to unintended and expensive consequences.  All of the proposals before the HELP committee are controversial, and Congress must proceed carefully to avoid exacerbating the problem.]

Of all the things we might do to improve our health care system, the one reform that is more important than any other is almost never discussed.

It is ignored by Republicans. By Democrats. By the experts. By the think tanks. And by just about everybody who has an opinion on health policy.

Here it is: If we want the system to work well, we must make it profitable to take care of sick people.

Instead of debating how to expand Medicare coverage, politicians should focus on fixing the fatal financial flaws in the existing program that threaten to bankrupt the nation.

Medicare spent 3.6% of gross domestic product in 2016, more than six times the share it consumed in 1967, the first full year it was implemented. The forecasts I have analyzed show that the share of GDP will rise to at least 9% within 75 years—and that’s the good-news scenario. Other plausible forecasts show that Medicare could spend more than twice that.

Two efforts are underway in the Senate to compile bipartisan packages aimed at lowering and bringing transparency to health care costs, with the goal of merging them on the Senate floor this summer:

  • Senate Finance Committee Chairman Chuck Grassley (R-IA) and his Democrat counterpart, Ron Wyden (D-OR), are poised to release a drug pricing proposal by the end of the month.
  • The other top health care committee — Health, Education, Labor and Pensions — is preparing for a hearing on a health care pricing package recently released by its leaders, Chairman Lamar Alexander R-TN) and Patty Murray (D-WA).

Neither package will include one singular big thing to lower health care costs for consumers. Instead, they’ll be full of smaller proposals that legislators say together could help move the needle on prices.

Medicare Advantage (MA) and Part D applications were up 87% during the open enrollment period between January and March compared to the same period last year, according to a new report from eHealth.

The report looks at the costs and reactions from enrollees of Medicare’s latest open enrollment period. During the first three months of this year, the average MA premium dropped 33% from $12 to $8 from 2018, and average out-of-pocket limits decreased 11%. The average monthly premium for Part D coverage decreased during this time as well from $26 to $25.

One solution to most instances of surprise billing is to simply eliminate the possibility of being treated by an out-of-network emergency, ancillary, or similar clinician at an in-network facility. There are multiple ways to accomplish this, but one approach—sometimes called “network matching” or an “in-network guarantee”—would require these facility-based clinicians to contract with every health plan that the facility at which they practice accepts or, alternatively, choose to secure payment from the hospital rather than insurers. That requirement can be imposed either directly or, alternatively, indirectly by making joining an insurer’s network the only way clinicians can secure payment.