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An executive order aimed at "strengthening" Medicare is mainly focused on providing older adults with more Medicare Advantage plans and options. Getty Images
  • President Trump signed an executive order aimed at strengthening Medicare, including Medicare Advantage, the private insurer alternative to traditional Medicare.
  • Some advocacy groups have criticized the order claiming that Medicare Advantage plans offer limited provider networks and discourage sicker adults from enrolling in these plans.
  • The order also calls for expanded access to medical savings accounts (MSAs). These are typically combined with a high-deductible Medicare Advantage plan.
  • Because of the lack of detail in the executive order, it’s difficult to say what effect this will have on Medicare, and there’s no guarantee when, or if, these items will be implemented.

President Trump signed an executive order October 3 aimed at strengthening Medicare, including Medicare Advantage, the private insurer alternative to traditional Medicare.

Some advocacy groups have been critical of the order’s push to expand the privatization of Medicare. They claim that Medicare Advantage plans offer limited provider networks and discourage sicker adults from enrolling in these plans.

However, some healthcare professionals welcomed the order’s emphasis on “value-based care,” in which providers are paid for the quality of care they provide rather than how many services they bill for.

Because of the lack of detail in the executive order, it’s difficult to say what effect this will have on Medicare. Also, there’s no guarantee when, or if, these items will be implemented.

Here’s what we know so far.

The order calls for older adults to have “more diverse and affordable plan choices” — which largely means more Medicare Advantage plans.

These plans are already popular. According to the Kaiser Family Foundation, 34 percent of Medicare beneficiaries were enrolled in a Medicare Advantage plan in 2018, with enrollment doubling over the past decade.

Peter Huckfeldt, PhD, an assistant professor of health policy at the University of Minnesota School of Public Health said the executive order could “accelerate that even further.”

The Centers for Medicare & Medicaid Services (CMS) also expects Medicare Advantage premiums to drop by 23 percent from 2018 to 2020. It’s unclear what effect the executive order will have on premiums beyond then.

The order also encourages private insurers to develop “innovative” Medicare Advantage plan designs and payment models, including covering supplemental benefits and telehealth services.

Most Medicare Advantage enrollees already have access to benefits not covered by traditional Medicare, such as dental, fitness, and vision benefits, reports the Kaiser Family Foundation.

The order also pushes for Medicare Advantage enrollees to “share more directly in the savings from the program,” either as cash or other types of rebates.

And it calls for expanded access to medical savings accounts, or MSAs. These are typically combined with a high-deductible Medicare Advantage plan.

Only about 5,600 Medicare beneficiaries had a MSA in 2019, according to the Kaiser Family Foundation.

The order would also allow older adults who choose not to receive benefits under Medicare Part A (inpatient care in a hospital or other facility) to keep their Social Security retirement insurance benefits.

The executive order would encourage more face time between patients and providers. However, this may not mean more time with a doctor.

Instead, the order encourages greater use of non-physician providers like nurse practitioners and physician assistants.

Part of this shift would involve how these providers are supervised in the hospital or clinic.

For example, currently “in some states nurse practitioners need to be supervised, but in other states they are more autonomous,” Dr. Huckfeldt said. “This order could allow nurse practitioners to practice autonomously everywhere.”

The American Academy of Nurse Practitioners and the American Academy of PAs were both supportive of the order’s proposal for fewer practice restrictions on these providers, reports MedPage Today.

The order also recommends that providers be paid by Medicare based on the services provided rather than their occupation. For example, nurse practitioners would no longer be paid less than a physician for services like checking a patient’s vitals or doing a physical exam.

Non-physician providers would still only be allowed to provide care that falls under their profession’s “scope of practice.”

Medicare and the states, though, don’t always agree on what this scope is.

This order and a draft rule published in August suggests that CMS may defer “to state law and state scope of practice,” at least in the case of physician assistants.

In addition to shifting who provides care, the order may affect where visits occur, through what it calls “site neutrality.”

Elena Prager, PhD, an applied microeconomist at the Kellogg School of Management at Northwestern University, said this implies that “a given service would be reimbursed the same amount regardless of whether it takes place in a hospital or a physician’s office.”

Currently, Medicare pays more for certain services performed in a hospital than when they happen in an independent physician office.

The order also calls for the removal of “unnecessary barriers to private contracts.” Dr. Prager said it’s not clear what this means, but if it affects the types of Medicare Advantage contracts that enrollees can be offered, it “could be highly disruptive” to Medicare.

Advocates of the privatization of Medicare claim that Medicare Advantage plans are more efficient because the plans receive a set payment for each enrollee, what’s known as a capitation payment.

“They pay for all of the enrollee’s healthcare out of that payment and they get to keep the remainder,” Huckfeldt said. “So there's a strong incentive for plans to avoid unnecessary health care.”

The downside of this kind of payment model is that plans may try to save money by providing too little care. But Huckfeldt said the Medicare Advantage program also has incentives to keep that from happening.

For example, because plans are responsible for the cost of hospital stays, they save money by keeping enrollees healthier and out of the hospital.

This may encourage them to cover preventive care and follow-up visits, as well as help coordinate care among a person’s providers — which can help keep people healthy and speed up their recovery.

Plans also receive additional payments when they meet certain quality goals.

There is research showing that this payment model works.

Some studies show that Medicare Advantage enrollees have fewer hospital stays and lower mortality rates compared to people with traditional Medicare.

But “most of the studies only look at mortality as an outcome,” Prager said, “so if [Medicare Advantage] makes people sicker but does not kill them, then the studies wouldn’t pick up on that.”

In terms of services needed, Medicare Advantage plans may also be better suited for healthier people.

“There's other evidence that people in Medicare Advantage plans who use a lot of intensive services such as post-acute care and hospital care are more likely to switch back to traditional Medicare,” Huckfeldt said. “This could signal some kind of dissatisfaction.”

Comparing traditional Medicare to Medicare Advantage is difficult, because even Medicare Advantage plans vary among themselves in terms of quality and cost.

To help older adults make smarter healthcare choices, the executive order will push for them to have access to “better quality care and cost data.”

However, more choices and more information doesn’t always equal better care.

“The downside to giving seniors ‘more choice’ is that it’s extremely well documented that seniors have difficulty selecting the plans that are best for them,” Prager said.