Medicare for all (who want it)

So, as mentioned yesterday, while “Medicare for all” may be popular, a plan that abolishes private insurance (as Bernie Sanders and Elizabeth Warren have called for) is not.  A lot of people are really quite averse to giving up their current insurance.

The thing is, though, there’s actually a pretty good policy solution for this.  Back in July, Ezra Klein gave a nice explainer on the Medicare for all (who want it), i.e., Medicare Extra plan proposed by Center for American Progress works.  It’s good stuff.  Ezra:

You can think of the Center for American Progress’s Medicare Extra plan as simultaneously trying to answer the leftist critique of Obamacare and the centrist critique of Medicare-for-all.

Like Medicare-for-all — and unlike Obamacare — it’s universal, it uses Medicare’s pricing power to hold down costs, and it rebuilds the entire health system around public insurance. But like Obamacare, it’s designed to minimize middle-class tax increases while stepping gingerly around people’s fear of change and mistrust of the government. And so, unlike Sen. Bernie Sanders’s Medicare-for-all bill, it holds on to much of the employer-based private insurance market and includes means-tested premiums and cost sharing for all but the poorest Americans.

“We were balancing two considerations,” says Topher Spiro, vice president for health policy at CAP. “One was employer coverage, particularly large employer coverage, is working for many people and they’re satisfied with it. They fear disruption, whether that’s rational or not. But there’s also this trend of increasing deductibles in employer coverage, which we address by allowing [both employers and individual employees] to opt into the Medicare plan.”…

So how does it work? Let’s run through the details:

  • Medicare Extra builds a new public insurance program called, well, Medicare Extra (the branding leaves something to be desired). The new plan shares Medicare’s name, but its benefits are much more expansive: It includes, for instance, vision, dental, and reproductive health coverage. [emphases mine]
  • Premiums are on a sliding scale, with Americans under 150 percent of the poverty line paying nothing while those making 500 percent of the poverty line or more see their total contribution capped at 9 percent of income. Cost sharing, too, varies by income, total out-of-pocket spending, even for the richest, capped at $5,000.
  • Newborns would automatically be enrolled in Medicare Extra, as would the uninsured and every legal resident upon turning 65. Medicaid and Obamacare would be folded into the new program, and anyone on traditional Medicare, Medicare Advantage, Tricare, Veterans Affairs coverage, the Federal Employee Health Benefits Program, the Indian Health Service, or employer-sponsored coverage could opt in. Given Medicare Extra’s benefits and subsidies, Avalere expects that most people will move to ME within a few years.
  • The plan saves money by expanding Medicare’s pricing power throughout the system. Medicare Extra sets hospital prices at 110 percent of what Medicare pays now and everything else at current Medicare rates (though it tweaks rates up for primary care and down for specialty care). Importantly, the plan extends those prices to employer-sponsored coverage: It’s the first of the major Democratic proposals to rely on a version of all-payer rate setting. In doing, it achieves the pricing savings you see in Medicare-for-all, but without cutting private insurance out of the system.
  • In a nod to the fears swirling around single-payer, Medicare Extra wouldn’t abolish private health insurance. If you like your employer-based plan — or traditional Medicare, or VA insurance — you can keep it. In addition, the proposal also envisions private options within the new Medicare Extra plan; these “Medicare Choice” plans would have to offer the same benefits as Medicare Extra, but Medicare would only reimburse their costs at 95 percent of the program’s rates.
  • Everyone in the system, from individuals getting insurance from their employer to traditional Medicare enrollees, could choose to purchase Medicare Extra instead, and they’d be eligible for normal subsidies and employer cash-outs if they did so. That’s not how Obamacare works now, for instance — you can’t convert the money your employer is spending on your health insurance to buy a better plan on the exchange.

The idea is that if you like your health insurance, you can, for the most part, keep it — but why would you?

The benefits of single-payer without the costs?

The question lurking behind CAP’s Medicare Extra plan is simple: Can health reformers have it all? Can they have the coverage and efficiencies of single-payer without the disruption, taxes, and political opposition a wholesale remaking the current system entails? …

The health industry is a problem for reformers, make no mistake about it. But the reason they’re so powerful is that the public is cautious when it comes to health coverage: Government takeovers and new taxes scare them. That public fear is powerful material for the health industry to work with, but it also exists on its own terms: Americans don’t much trust the government, they don’t like to pay taxes, and many reformers believe that for a plan to pass, it has to make concessions to those fears, not dismiss them.

This is the needle CAP’s plan is trying to thread. They’re trying to extend the benefits of wholesale reform while keeping the tax increases quarantined to the well-off and making sure most people don’t feel the government is taking anything away from them. The idea is to lure people into Medicare Extra, not force them into it.

Sign me up!  It may not be perfect, but this strikes me as about as good a compromise on policy and political realism as we can hope for.  And as Ezra concludes:

But taking a step back, this means Democrats now have two major plans that offer truly universal health coverage, albeit in different ways and with a different set of trade-offs. That’s quite a contrast with the Republican side of this debate, which is pursuing a legal case to eliminate the Affordable Care Act, and policy options that would leave tens of millions uninsured.

Back in July, Drum also talked about Harris’ gradual transition plan:

I guess “Medicare for All” is now the official name for any kind of universal health care proposal, so today Kamala Harris unveiled her Medicare for All plan:

But Harris outlined a longer transition time — 10 years — to implement the new program, gradually incorporating newborns and uninsured people through automatic enrollment and giving others more time to move to the government-run plan.

….The proposal offers new clarity on the role of private insurers, which Harris had been muddled about in the past. Unlike Sanders, who would curtail their participation almost entirely, Harris would allow corporate plans to offer competing Medicare plans, modeled on the Medicare Advantage plans available for older Americans now. Those plans would have to adhere to government-set requirements on benefits and costs to ensure access and limit insurer profits….Harris would limit [] tax hikes to those making $100,000 or more. Instead of taxing lower-income families, she would impose a fee on Wall Street transactions and make other changes to the corporate tax rate.

That’s fine, and it’s very on-brand for Harris: lefty, but not too lefty. Given the history of Medicare Advantage, which has never been a very efficient delivery vehicle, I’m not sure that’s a great model for the private insurance part of Harris’ plan, but it’s hardly the worst idea either. Overall, this plan sounds quite workable. You can read more about it here.

Should Elizabeth Warren be the nominee, I can certainly see her doing something more pragmatic like endorsing something similar to what Harris has proposed.  And, overall, policitically, I really think the key is the carrot, not the stick.  Simply create a better deal with a government plan and give it time.  Immediately telling people they can no longer have the insurance they have come to expect and rely upon (even if the new insurance is better) just won’t work.

About Steve Greene
Professor of Political Science at NC State

3 Responses to Medicare for all (who want it)

  1. R. Jenrette says:

    It seems short sighted to start a program that has 160 million enemies the minute it’s suggested….that is, the holders of private health insurance which they don’t want to give up, rightly or wrongly.
    So, to me, Medicare Extra seems like a practical and more effective way to go.
    I think Elizabeth Warren could go for that. Maybe an ideologue would not.

  2. homeys44 says:

    So, a backhanded attempt at abolishing employer insurance…under the guise of “you have a choice”. But, the key question is why does an already insured person need this “choice”? Other than to satisfy the Left’s desires to put more people onto Medicare. What problem is it solving?Sanders couldn’t even answer this question when asked at a townhall.

  3. Robert Smith says:

    Have medicare and supplemental and is OK. However. they take out from my monthly check part D for drugs and still have to pay for a part D drug plan. Seems like I am paying twice.

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