By Jonathan Oberlander
The Milbank Quarterly, September 15, 2019
“Medicare for All” has emerged as a major flashpoint in American politics. Its unexpected rise is, in part, a reaction to a decade of the Affordable Care Act (ACA, also known as Obamacare) — an ironic development given that the ACA embodies a reform model that builds on private coverage and Medicaid.
Yet, just as Medicare for All is moving to center‐stage in US health care debates, supporters of the idea are fighting over where to define its boundaries.
This essay traces the evolving language of health reform in the United States, clarifies the various meanings of Medicare for All, and explores what the debate over the label and other Medicare‐related expansion plans, including the pubic option, reveals about health care politics.
The Shifting Language of Health Care Reform in the United States
As Canada managed to insure all its citizens while spending much less on medical care than the United States, reformers in this country increasingly began to call for adopting Canadian‐style national health insurance. By the 1990s, “single payer” had become the term of choice for American reformers, including Physicians for a National Health Program, who advocated replacing our mix of public and private coverage with one government insurance program.
Single payer accurately described how medical services would be financed in a Canadian‐like system—hospitals and doctors would be paid for covered services by one insurer. Still, single payer was ultimately a technical term that generated little public appeal, public understanding, or political momentum.
Reformers’ recent invocation of Medicare for All reflects a significant change, and undoubtedly an improvement, in political strategy. Medicare for All immediately connects proposals for government insurance to a popular, familiar, and entrenched program that already exists in the United States rather than to a confusing financing label or a mostly unfamiliar and often vilified foreign insurance plan.
Polling data support the labelling change: Americans are much more likely to register support for Medicare for All (or universal health coverage) than single‐payer health insurance. The turn to Medicare for All also reflects the improved performance of Medicare, whose relative success (compared to private insurers) in moderating spending growth since the 1980s and maintaining low administrative costs has bolstered the program’s reputation among reformers and policy analysts. Medicare is often portrayed not merely as an equitable platform through which to provide all Americans with insurance, but as a symbol of administrative efficiency and cost control. Medicare for All is thus seen as the key to making health care a universal right, eliminating the problems of the uninsured and underinsured, reining in spending and regulating prices in the world’s most expensive health care system, and reducing the prolific waste and administrative costs generated by convoluted billing and insurance arrangements.
The Pure and Hybrid Models of Medicare for All
The pure model of Medicare for All seeks to establish a national insurance program operated by the federal government, prohibiting private insurance for services covered by the publicly funded government plan. In contrast, the hybrid model would allow private insurance plans that abide by federal regulations, including those sponsored by employers, to operate alongside and within a government‐run Medicare program.
The pure and hybrid models advance varying goals, embody different philosophies, and reflect different political calculations. The pure model, which is how the health reform community has until now generally understood Medicare for All, presumes that America’s various health care pathologies can only be remedied by eliminating private insurance as a major source of coverage. The goal is not simply to achieve universal health insurance but to do it through a government program and without relying to any meaningful degree on private insurers. Health security will never be achieved, from this perspective, unless private insurance is jettisoned because the corrosive effects of market forces are seen as the central problem in American health policy.
In contrast, the hybrid model is willing to leverage both public and private insurance to cover all Americans. It makes a concession to perceived political realities and attempts to lessen disruption by preserving a significant role for private insurers and employers. It also embraces the altered nature of Medicare, building on the preexisting Medicare Advantage component.
Advocates of the hybrid model believe that the goal of enacting universal coverage justifies the retention of private insurance. However, by preserving Medicare Advantage, such models also inherit its problems, including a record of federal overpayments to such plans.
A Medicare‐like Public Option
Adding to the confusion is a third health reform plan… Americans could join a new “Medicare‐like” or “Medicare‐type” public option or otherwise remain in their current health plan.
Such plans are not Medicare for All, nor are they even Medicare for More since they generally seek to establish a new Medicare‐like program rather than directly expand the current Medicare program.
Ultimately, public option plans aim to advance the rhetoric of choice while harnessing the benefits of association with Medicare without triggering the political liabilities of Medicare for All.
From the Conclusion
Medicare for All is now receiving more serious consideration from presidential candidates and lawmakers than at any time since the program’s enactment over five decades ago. The debate over what Medicare for All means and which model of Medicare (or Medicare‐like) expansion to pursue reflects persistent tensions in health policy between pragmatism and principle, incremental and systemic reform, and building on or tearing down the status quo.
The question is whether Medicare will endure beyond 2020 as a prominent reform model that defines the health care debate or whether we are witnessing an ephemeral development that presages US health policy moving in yet another direction.
By Don McCanne, M.D.
Jonathan Oberlander has provided an excellent description of how the “Medicare for All” label has been transformed from one representing the altruistic model of single payer reform that would ensure affordable, equitable health care for absolutely everyone into a confusing term that has different meanings for different advocates, but particularly has been used to ensure that the private health insurance industry continues to have a major role in marketing their insurance products and their administrative services for self-insured employers.
The concept is being sold that we can have Medicare for All while still allowing individuals to obtain private plans through their employers, or through the individual market, or through Medicare as private Medicare Advantage plans – that it really wouldn’t make much difference if choice of private plans remained an option. The nation really hasn’t grasped the concept that not only are private plans responsible for creating barriers to care (high deductibles and limited provider networks), but, most of all, they are also responsible for creating profoundly expensive administrative waste (hundreds of billions of dollars), and are responsible for the failure to control excessive prices in health care. The “pure” Medicare for All model recovers this waste and redirects it to filling in the voids in care for the currently uninsured and underinsured.
We can’t expect those in bed with the insurance industry to be responsible in their rhetoric, but those who really do care about the health care of all of us should have a better understanding of what is happening by reading Oberlander’s treatise on the subject.
Where are we going to get the money? In a pure single payer model, we’ll recover close to half a trillion dollars in administrative waste; we’ll use economic tools (global budgets, negotiation) to ensure that prices reflect value; and we’ll use separate budgeting to ensure appropriate capacity in the system.
Although Oberlander shows us how we moved away from the poorly understood, wonkish term “single payer” when we adopted the “Medicare for All” label, unfortunately we are going to have to distinguish the pure model from the others. Perhaps the easiest way is to salvage the single payer term by referring to “Single Payer Medicare for All.” Otherwise opponents will assign unfavorable attributes to “Medicare for All” and then use that to condemn the model.
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