Medicare for All (who want or need it): A path for presidential candidates?
By Andrew Sprung
Commitment to "Medicare for All" or something like has become something of a litmus test for Democratic candidates. There are real perils for a candidate, however, in committing to transitioning the U.S. to a single payer healthcare system in one leap. *
The tax hikes would be double-digit in a tax-averse country. Some 156 million Americans are insured through employers, and while out-of-pocket costs in employer coverage have been rising swiftly, tens of millions are wary of losing the plans they have. In Kaiser Family Foundation polling, support for "Medicare for All" collapses, from 56% in favor to 37%, when people are asked if they would support a program that raises taxes or eliminates private health insurance companies. In contrast, creating "a federal program similar to Medicare open to anyone" that would allow people to keep their current coverage is supported by 74%.
Medicare for All Who Want It?
Since at least the early 2000s, various plans have mapped out Medicare expansion by degrees. In its early iterations, the 'public option,' a watered-down form of which was eventually dropped from the ACA, was a Medicare extension offered to people who lacked access to other insurance -- with a buy-in option for employers and/or employees. Some versions envisioned employer-sponsored insurance (ESI) dying rather rapidly on the vine; others foresaw permanent competition between ESI and the public plan; and others left the question open.
Plans of this sort include Helen Halpin's CHOICE program (2003), Rep. Peter Stark's Americare plan (2006), and Jacob Hacker's Health Care for America plan (2007), all of which allowed employers to buy in to the public plan via a payroll tax. Current variants include Jeff Merkley and Chris Murphy's Choose Medicare Act and Tim Kaine and Michael Bennett's Medicare X Choice Act (buy-in for small biz only).
The most sweeping plan of this sort currently in the mix was first outlined in the Center for American Progress's Medicare Extra last March and has taken legislative form as the Medicare for America Act, introduced last December by Reps Rosa DeLauro (CT-03) and Jan Schakowsky (IL-09). This bill creates a revamped Medicare in which all children born in 2022 and after would be auto-enrolled. Employers could continue to offer coverage or pay an 8% payroll tax and refer their employees to the public program; employees could choose "Medicare" over a plan offered by the employer. Subsidies would be generous at low income levels, and no one would pay a premium equaling more than 10% of income. Seniors and Medicaid enrollees would be folded in. Long-term care would be included. The Huffington Post's Jonathan Cohn takes an in-depth look at this bill here.
Health reform with a razor-thin Senate majority
Healthcare scholar David Anderson recently outlined the intense challenge Democrats will face, should they gain the presidency and both houses of Congress (with a presumably razor thin Senate majority at best), in prioritizing among a huge list of agenda items. If an incoming Democratic president chooses not to make healthcare reform priority number 1, patching the ACA would serve as a kind of placeholder. Such patches might start with capping individual market premiums as a percentage of income for all comers and, with varying degrees of cost and complexity, enriching and redesigning the subsidy structure.
Promises, promises
Is the newly elected president likely to have run on a commitment to Medicare for all? There's a good chance the eventual winner (if a Democrat) will hedge, as many Congressional candidates did, and advocate a path to Medicare for all, as the plans outlined above do.
In the 2018 Congressional campaign, Tom Malinowski, newly elected in New Jersey's 7th district, handled this distinction well:
On healthcare, Malinowski said he “does not support Medicare for all, but the idea of a Medicare option for all is worth exploring.” He said he’s spoken to many people who appreciate having healthcare options and he “would not force anyone to give up private health insurance which many Americans are happy with,” though he added that expanding a Medicare option could eventually lead to a single-payer type of system if people chose it voluntarily.
Later in the campaign, Malinowski came out more firmly for a plan along the lines of CAP's Medicare Extra, the blueprint for the Medicare for America bill described above. A presidential campaign will probably demand a full-blown plan, as the top three candidates were driven to develop in 2008.
A health reform Lego kit?
A candidate who seeks flexibility might seek to make her plan as modular as possible. First steps might include a strong public option introduced into the ACA -- one tied to Medicare rates,that providers who accept Medicare would have to accept. Such a plan would probably also entail raising the value of a benchmark ACA plan, as the Merkley-Murphy Choose Medicare Act does. The ACA's silver plan benchmark, designed to cover 70% of the average enrollee's costs, clearly has not cut it with the public (in some cases, it now includes deductibles as high as $6,000). Incremental steps could include allowing small business buy-in and then large employer buy-in. Integrating first steps with an ACA upgrade enables next steps to be contingent -- on need, budget and system performance.
Another route is to make all options in an ACA-like marketplace quasi-public, as Medicare Advantage and managed Medicaid plans are. That is, impose a more tightly structured plan design, as California does; enrich subsidies, making plans that cover at least 80% of costs affordable to all; and effectively set (or cap) the rates plans pay to providers. Simplicity, adequacy and cost control are the essentials. An individual market that meets those criteria can be opened by degrees to the employer market.
The argument against incremental change is that we have a system of Byzantine complexity as it is, and one distorted by unchecked profit motive in all sectors -- hospitals and physicians as well as the more-often vilified insurers and pharmaceutical companies. But incrementalism can impose cost control as well. The trick is to increase in phases the percentage of people covered by plans in which payment rates to providers are set by the government -- currently about 50%. Commercial insurers pay hospitals almost twice as much as Medicare does, and physicians about 25% more. A swift end to private insurance would cause massive disruption and perhaps care shortages. But if universal healthcare is to be affordable, the cost curve has to be bent toward norms paid to providers and drugmakers in the rest of the developed world.
There are fancier modes of payment reform than government-imposed cost control. But lack of the latter is what separates our healthcare system from the rest of the developed world -- and makes universal coverage seem out of reach.
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* Bernie Sanders' Medicare for All bill would complete the transition in four years.
Andrew Sprung, co-chair of BlueWaveNJ's healthcare committee, writes about healthcare policy on his blog, xpostfactoid, and at healthinsurance.org and other publications.