Paul Ryan: ‘Fee-For-Service Doesn’t work,’ MA the Future of Medicare

As if home care agencies needed any more encouragement to dive into the Medicare Advantage (MA) world, they got some last week — courtesy of a well-known Capitol Hill veteran.

Home care providers have been positioning their businesses to appeal to potential MA players since April 2018, when Centers for Medicare & Medicaid Services (CMS) policymakers announced that certain in-home care services and supports would be allowable as supplemental benefits starting in 2019. FirstLight Home Care CEO Jeff Bevis, CareLinx CEO Sherwin Sheik, Elara Caring CEO Scott Herman and other executives have all recently discussed the upside the MA program presents, though the lion’s share of opportunities likely won’t arise until 2020 or 2021.

Through Medicare Advantage, the government allocates federal dollars to private insurers so they can offer MA plans covering standard Medicare benefits, plus a number of extras, such as vision or dental. It’s this type of public-private partnership that will form the basis of comprehensive Medicare reform as the baby boomer population ages, according to former Speaker of the House Paul Ryan.


“I believe the future for Medicare is in the Medicare Advantage type of space,” Ryan, a Wisconsin Republican, said Thursday during a keynote discussion at the National Investment Center for Seniors Housing & Care’s (NIC) spring conference in San Diego.

Ryan, who left office in January after declining to run for re-election, lauded Medicare Advantage plans as a way to stave off potential financial disaster to the Medicare program, which some projections say will go broke by 2026.

“The nucleus of the system is the patient. It’s the consumer,” Ryan said. “And the providers — in this case, insurers — compete against each other for that person’s business.”


MA enrollment is projected to reach a new all-time high with more than 36% of Medicare beneficiaries projected to be enrolled in Medicare Advantage in 2019, according to CMS. By 2025, MA penetration could be as high as 50%, other projections from industry research firms have found.

“[MA] saves money and it helps patients get better health outcomes,” Ryan said. “I really think that’s going to be the future of Medicare.”

CMS has made multiple follow-on moves since its groundbreaking decision to give more flexibility to MA plans looking to offer in-home care services and supports as supplemental benefits.

In January, for example, policymakers proposed changes meant to help older adults and chronically ill individuals pick MA plans that are more closely catered to their health needs. In the past, MA plans have only been allowed to offer primarily health-related supplemental benefits uniformly to all enrollees.

Weeks prior to that proposal, CMS also announced it would test a hospice MA carve-in under its Value-Based Insurance Design (VBID) model in 2021.

More than half of all MA members want their plans to cover assistance at home, according to a recent survey. Despite new rules allowing it, the majority of beneficiaries will have to wait until 2020 or later for their plan to have that option, experts believe.

Without a significant overhaul to focus more on Medicare Advantage-style solutions, Ryan said, the government will have to resort to “screw-tightening” the current fee-for-service model — an option that he didn’t paint as particularly viable.

“Fee for service doesn’t work,” he said. “That’s why you have to go to a value-based system, which is what Medicare Advantage and premium support is attempting to do.”

As speaker, Ryan oversaw repeated efforts by republicans to repeal the Affordable Care Act and cut federal spending on benefit programs, including a serious push in the summer of 2017 to shift Medicaid to a block grant program.

In the 2017 fiscal year, fee-for-service Medicaid spending on home health and personal care services totaled about $63.9 billion nationwide, according to statistics from the Kaiser Family Foundation.

Additional reporting by Robert Holly

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