New single-payer plans don’t need to worry about carving out roles for health-care profiteers.
By Adam Gaffney
The Nation, February 18, 2019
Does achieving “Medicare for All” mean mostly eliminating private health insurance? Single-payer proponents say yes: After all, if a public plan provides comprehensive, no-deductible coverage for everyone, nobody would want—much less be willing pay for—duplicative private coverage.
Let’s assume we agree on the need for a universal public-insurance plan that covers everyone, as in Canada, Great Britain, or France. Would there still be a role for private insurance? If so, what would it be?
In nations that have universal public-insurance programs, private health plans fall into three categories: “duplicative” plans, “supplementary” plans, and “complementary” plans.
Let’s start with “duplicative” coverage, which refers to private plans that “duplicate” benefits of the public plan, like covering doctor visits or procedures that are also covered by the single-payer plan.
At first glance, it might seem odd that insurers would offer such plans, much less that anyone would pay for them. You wouldn’t, for instance, buy a private plan hawked by a company that promises you “access” to Central Park. You already have that. Obviously, such plans must offer some advantage to be viable.
And they do: In the single-payer context, they let individuals jump to the front of the line, gaining wider or quicker access to physicians’ services or other care covered by the public plan.
Should a scarce bed go to a less sick person over a sicker one who needs it more, just because the former has better-paying insurance? Most, I believe, would find that appalling.
But essentially, that’s what duplicative plans promise, albeit usually for non-emergency care.
Whether you’re talking about access to a primary-care doctor or a specialist, a psychiatrist or a hospital bed, health—not wealth—should be the factor determining access.
Duplicative plans, in other words, are not desirable, but they are also unnecessary. We should not embrace them.
But how about “supplementary” coverage, the private plans that provide benefits for services not covered by the public system? As Sarah Kliff of Vox notes, in Canada, the public system doesn’t offer universal drug benefits or dental care, so people need supplementary private plans to cover their medicines and their teeth. Similarly, in the United States, Medicare doesn’t cover dental-care benefits, and until 2003 didn’t cover prescription drugs.
The single-payer bills in Congress do not ban supplementary private coverage. However, because both the forthcoming bill in the House and (with the exception of long-term care) the bill in the Senate have comprehensive benefits—including dental care, prescription drugs, and vision care—there is not much left for supplementary plans to cover. Perhaps cosmetic surgery, or trips to Swiss medicinal spas?
When fashioning any new health program, we should pick and choose the best policies. For instance, the United Kingdom does have universal drug coverage (mostly without co-pays) and, consequently, basically everyone gets the medicine they need. That should be our model. The underlying question is simple: Do we offer comprehensive benefits in the universal public system, or do we drop benefits at random so as to give Aetna and Cigna something to do? The answer, to my mind, seems clear.
Finally, many nations have “complementary” private plans, which cover the co-pays and deductibles imposed by some (but not all) public systems.
For instance, many Medicare beneficiaries take out so-called “Medigap” plans today, which cover that program’s often substantial out-of-pocket expenses. In France, almost everyone has a complementary plan that covers the cost-sharing (e.g., co-pays) imposed by the single-payer program. The United Kingdom and Canada, in contrast, have no co-pays for physician care, diagnostic testing, emergency-room care, surgical procedures, or hospital care.
But far more importantly, let’s not forget how bad co-pays and deductibles are. It’s not just that they are unnecessary for cost control: Canada and the United Kingdom provide no-deductible universal coverage and have lower overall health-care costs. And it’s not just that they squeeze family budgets, effectively worsening inequality: By deterring the use of needed care, they are also harmful to health itself.
The presence of complementary private plans requires the erection of unnecessary financial barriers to care. Without the latter, we won’t need the former.
In other words, the only way to make room for a significant role for private insurance in the American context is to make the public system paltrier or skimpier, to impose onerous co-pays and deductibles, or to let the rich preferentially displace working-class people from hospital beds and doctors’ offices. But it doesn’t seem to make sense to punch holes in your own floor just to create work for a carpenter. That is particularly true if your floor is your health care—and your carpenter is an extractive insurance giant.
Adam Gaffney is a pulmonary and critical care specialist at the Cambridge Health Alliance and Harvard Medical School, and President of Physicians for a National Health Program.
By Don McCanne, M.D.
It has often been said that even if we enacted and implemented a single payer Medicare for All program there would still be a need for additional private insurance, whether duplicative, supplementary or complementary. That is not true.
Not only would a well designed single payer system obviate the need for additional coverage, we also would not have to face the additional costly administrative excesses of superfluous insurance, plus we would not be introducing the inequities that are often characteristic of such plans.
A single, publicly-funded, universal risk pool that provides comprehensive benefits for everyone is the most effective, most efficient, and least expensive on a per capita basis of all models of health care financing that would truly ensure that all of us receive the health care that we need. As Adam Gaffney explains, we shouldn’t compromise in the design of a single payer Medicare for All program simply to accommodate the desires of the expensive, intrusive and administratively inefficient private insurance industry. We need them out of our system.
An excerpt from yesterday’s Quote of the Day seems appropriate here:
“Particularly hot right now is the meme that people would have to sacrifice by giving up their private insurance if we switched to single payer. But private insurers are intermediaries that use administrative mechanisms designed to reduce utilization of health care no matter how beneficial that care may be. High deductibles and other cost sharing create financial barriers to care. Narrow provider networks limit access to health care professionals and institutions. Administrative interventions such as prior authorization requirements create additional barriers to care. And for this we pay more because of these expensive administrative functions that provide no health benefit. Besides, how many people do you know who have been able to keep their same precious private insurance plan throughout their lives? Nobody. Private insurance is an unstable method of financing health care with constant changes in providers, benefits, and in the insurers themselves, especially with inevitable changes in employment. Switching from private insurers to stable, life-long coverage is not a sacrifice, but rather it is another benefit of a single payer system.”
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