Medicare for… all/some/none?

There’s very good debates to be had on both political and policy grounds on how Democrats should pursue the next-stage of health care reform.  On political grounds… does a Medicare for all who want it (and maybe everybody down the road) have a much clearer path than Medicare for all, now?  You would think, but maybe since this is just the proverbial camel’s nose under all the same Interests that would align and fight like hell against Medicare for all would align and fight just as much against any expansion of Medicare that was designed to increase down the road.

Policy-wise, there’s a lot to be said for single payer.  But, there’s plenty of well-performing health systems that retain a role for private insurance, e.g., Switzerland, Germany, France, Netherlands, etc.  And, I think there’s a very good argument that with starting from now, instead of a blank slate, that would would actually have more successful policy that allowed for the continuation of (much-more-regulated-than-now) private insurance.

Regardless, both the politics and policy are complex and there’s no clear slam-dunk.  And, thus, it’s really annoying when people pretend there us.  Lots of really good discussions of the matter of late that it’s worth highlighting.

First, Eric Levitz last month, “The Public Option Is Politically Superior to Medicare for All — But Only As a Sound Bite”

There is no “glide path” to universal coverage, only rocky roads.

In truth, the kind of public option that Biden and Buttigieg are campaigning on — one robust enough to make universal health care a reality in the United States — would not allow all Americans to “keep their private insurance if they prefer it.” In fact, their plans would guarantee massive disruptions to private coverage. As a campaign slogan, “Medicare for All Who Want It” reconciles the electorate’s desire for universal coverage with its aversion to disruptive change. But as a policy, it doesn’t – because no policy can.

The reason is straightforward. Unlike most other OECD countries, the United States never imposed strict cost controls on its health-care sector. And since human beings are willing to pay most any price to avoid death or severe illness — and since insurance often masks the true cost of medical services — America’s hospitals, doctors, and drug companies have been able to secure payment rates several times higher than their peers in other nations. To appreciate how thoroughly we’re being hosed by our health-care sector, consider this: In 2018, Canada spent roughly 11 percent of its GDP on health care, which was enough to provide all of its citizens with premium-free access to the world’s 14th highest performing health-care system. That same year, the United States spent roughly 18 percent of its GDP on health care — which, in our system, was not sufficient to provide any form of insurance to nearly 30 million Americans, nor to prevent more than 50 percent of our people from delaying or forgoing medical care due to affordability concerns.

In this context, there is no way to provide all Americans with high-quality, affordable health care without radically disrupting the status quo. To extend quality coverage to the millions of Americans who are uninsured or underinsured, you either need to force providers to accept drastically lower payment rates — which is to say, upend the business models underpinning nearly one-fifth of the U.S. economy — or increase federal spending on health care beyond Bernie Sanders’s wildest dreams…

If Uncle Sam uses his singular market power to force down costs — and doles out sufficient subsidies to make his “public option” universally affordable — then the private insurance industry as we’ve known it will cease to exist. Meanwhile, to make the provider payment cuts sustainable, America’s approach to financing hospitals and medical schools would need to be radically restructured. And to make the public option fiscally sustainable — once the vast majority of Americans have enrolled in it — President Biden would need to propose tax increases nearly as large as those put forward by Sanders and Warren.

Mainstream news outlets (and Democratic debate moderators) have almost all either ignored or failed to comprehend these facts. This is likely because, in the Beltway’s popular consciousness, the phrase “public option” is still associated with the policy that Democrats nearly implemented under Barack Obama…

Biden and Buttigieg are, in essence, promising to deliver all the benefits of single-payer, at the political and fiscal cost of a marginal provision of the ACA. And the press has largely affirmed their “free pony” pitch. But the health-care industry isn’t fooled. The hospital, pharmaceutical, insurer, and physicians’ lobbies acknowledge no distinction between Medicare for All and a strong public option, and are already funding messaging campaigns against both…

All of which is to say, when Medicare for All Who Want It stops being a campaign pitch, and becomes a bill before Congress, it will face almost all of the same political obstacles as single-payer.

I like Levitz’s conclusion, because, in the end he admits he really just doesn’t know:

Nevertheless, for whatever reason, the mainstream media is both very hostile to single-payer and extremely friendly to a public option — so friendly, major news outlets routinely frame the latter as a policy that would end all disruption in the private insurance marketand give all Americans access to a high-quality, low-cost public plan. Given these realities, running on Medicare for All would marginally reduce the Democrats’ odds of winning the presidency in 2020, while doing nothing to meaningfully advance the cause of universal health care. And winning in 2020 does matter, even if it will be insufficient for achieving universal health care: With the White House and a slim Senate majority, Democrats could realistically be expected to make marginal improvements to the health-care system (perhaps, if we’re lucky, improvements that make the fight for universal a bit easier down the road); increase funding for clean-energy R&D; restore civil-rights enforcement at the DOJ; adopt more progressive labor, financial, and environmental regulations; and forestall the conservative movement’s complete domination of the federal courts, among other things. Therefore, Democrats should run on the more popular, politically impossible health-care plan.

I personally don’t find this argument 100 percent persuasive. But it does strike me as coherent and difficult to dismiss. Anyhow, if every moderate Democrat and center-left pundit started framing their preference for a public option in these terms, it might make the American public a bit less complacent about the status-quo health-care system, and a bit more sympathetic to calls for radical change. (Which may be one reason why we’re hearing so many dishonest arguments for the public option instead.)

Meanwhile, SB shared with me this Data for Progress post based on a lot of public opinion polling to argue that once Medicare for All Who Want It (i.e., public option) comes under scrutiny, it will actually be less popular than Medicare for all:

Americans are fine with the continued existence of health insurance companies, but they clearly want drastic reforms to healthcare.

The question of what sort of healthcare plan each candidate supports has been at the forefront of the Democratic presidential primary. However, while Medicare for All has faced immense scrutiny, “public option” plans have faced very little. To see how a public option might stand up after facing attacks from the right, we tested a few possible messages for and against the public option…

After being shown each possible consequence of the policy, voters could report whether they supported, opposed, or were unsure how they felt about a public option. Voters saw each item in a randomized order.

Our results suggest voters are ready to do anything to curb the rising costs of healthcare. By an overwhelming margin (73 percent to 16 percent), voters say they would oppose any new healthcare policy that allowed costs to continue to rise. By a similarly strong margin (71 percent to 17 percent), voters also say they would oppose reforms that continued to limit choices to particular networks—a limitation that is also the defining feature of the current healthcare system…

Data for Progress has previously shown that Americans are ready for healthcare reform. And now we’ve seen that a public option must accomplish many things to be politically palatable to voters. Prices must stop rising, choices must be expanded, and the cost of access for users must be low or zero (i.e., out-of-pocket costs are deeply unpopular, except among Republicans). At the same time, voters would accept a public option if it was just that—an option, rather than a government monopoly.

There’s some interesting stuff here, but I think a lot of polling on health care is especially problematic.  Not because of the pollsters, but because on a lot of this, people have surprisingly unstable attitudes and they don’t actually understand the issues well enough to know what they want or how they would behave.   It was not that long ago, that polls showed people loved every element of the ACA, but the individual mandate, but hated the ACA.  Anyway, McElwee may be right, but when it comes to the right policy and politics on health care, an argument largely based on polling some indeterminate health care future is not going to win me over.

And, just because I’m on the topic.  As a country, we are so bad at this, “Every American family basically pays an $8,000 ‘poll tax’ under the U.S. health system, top economists say”

America’s sky-high health-care costs are so far above what people pay in other countries that they are the equivalent of a hefty tax, Princeton University economists Anne Case and Angus Deaton say. They are surprised Americans aren’t revolting against these taxes.

“A few people are getting very rich at the expense of the rest of us,” Case said at conference in San Diego on Saturday. The U.S. health-care system is “like a tribute to a foreign power, but we’re doing it to ourselves.”

The U.S. health-care system is the most expensive in the world, costing about $1 trillion more per year than the next-most-expensive system — Switzerland’s. That means U.S. households pay an extra $8,000 per year, compared with what Swiss families pay. Case and Deaton view this extra cost as a “poll tax,” meaning it is levied on every individual regardless of their ability to pay. (Most Americans think of a poll tax as money people once had to pay to register to vote, but “polle” was an archaic German word for “head.” The idea behind a poll tax is that it falls on every head.)

And that, again, is why meaningful reform is so damn hard.  That’s $8000 per head being distributed to hospital executives, doctors, administrators, technicians, insurance middle-men– you name it.  And none of them want to give up that money.

And, finally, Vox with a nice piece on how Taiwan built a single-payer system from scratch (honestly, the much easier way to do it) pretty recently.  There’s also a great segment on Taiwan in this now very-dated (2008), but still very relevant PBS “Sick Around the World” documentary that was required viewing for my Public Policy classes for years.

So, what’s the right approach then?  I don’t know!  But, based on my knowledge as a political scientist and upon following health care politics since 1993, I’m in the Medicare for All who want it camp.  But, I may well be wrong.

What I do know for 100% sure– we absolutely need to get to a place where, truly, all Americans have affordable health care and I will support anything that helps us get there.  

About Steve Greene
Professor of Political Science at NC State

4 Responses to Medicare for… all/some/none?

  1. Nicole K says:

    The federal government already has a system that could easily function as a public option with the FEHB health insurance for federal employees. OPM sets the requirements that insurance companies have to meet (comprehensive coverage basically) and sets the amount of premiums that are spent on patient care. Then the federal government pays between 72 and 75% of the premiums. There are currently about 20 nationwide plans available through major insurance companies. That means my blue cross coverage is exactly the same no matter where I live. FEHB already covers about 8 million people (4 million federal employees and 4 million retired federal workers since federal workers stay on the program when they retire).

    I don’t see why the government could not open that to allow anyone to buy insurance through that system and just means test a premium subsidy for non-employees who want to buy the coverage. In fact, I am pretty sure that was what the proposed “public opinion” was going to be had Republicans not killed it with talk about death panels.

  2. homeys44 says:

    Stiffer cost controls come thru managed care, where doctiors have less incentive to overtest and overcharge. But, the Democrats helped the medical industry in killing “manage care’s” viability among the US’s general public. So, lets not pretend that European cost controls have ever been on the table.

    As for “public option”….people on Medicare already have an option…..and they are increasingly choosing more cost effective private insurance. So, where’s this need for a public option when even Medicare folks don’t choose it? Why do people on an employer plan usually with an affordable HMO or PPO or HSA option… need a public option too?

  3. Nicole K says:

    Because there are lots of people who are working offered either horrible health insurance from their employer (eg non-aca compliant plans for example) or no health insurance.

    The public option does not mean that private insurance companies are not providing the health insurance coverage. It means that the government is involved in vetting the plans offered and they are available to anyone who wishes to participate.

    I work for the federal government and get health insurance that’s regulated and vetted by OPM. I bypass state regulated insurance markets and get insurance that is exactly the same anywhere in the US that I live. I have the option of about 20 different PPO, HMO, and HSA options, all from private sector insurance companies, that include broad network coverage, value network coverage, and catastrophic coverage. If I think the insurance company is taking advantage of me, I can appeal to OPM to override their decision.
    I have over 100k in health care costs every year, and I have had no problems getting prior authorization approved rapidly without any appeals or games. I could not say that about the broad network Bcbsnc policy I had for many years that was regulated by the state of NC. If I hadn’t been able to use my parent’s address in western NC and had to use an address in the triangle, I would have been completely shut out of being able to get a broad network ppo plan and forced into a “value” network (basically no out of state doctors, limited drug formulary, and very limited specialist participation) just to keep me from using Duke hospital.

  4. ragnarsbhut says:

    Nicole K and Steve Greene, what would it take to make this equitable for everyone in your respective opinions?

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