By James G. Kahn, M.D. and Elliot Marseille, Dr.P.H.
The Hill, August 14, 2019
Each candidate has their own way to fix what ails health insurance. Everyone claimed “Medicare” at the heart of their strategy. Sen. Bernie Sanders (D-Vt.) and Sen. Elizabeth Warren (D-Mass.) urged sweeping reform, while former Vice President Joe Biden and others advocated tinkering at the margins, stoking fear of big change.
What does it all mean?
After the first Democratic debate, we wrote a Cheat Sheet to clarify key concepts, and reviewed the minimal role of private insurance under “Medicare for all.” This time, we’re tackling people’s fears about reform and comparing the proposed plans.
Let’s start with three fears raised in the debate:
Should I be afraid of losing my insurance? Yes — under the current system. Unless you’re on Medicare, your health insurance is not guaranteed. Your employer can cancel the plan you like, forcing you to find a new doctor.
You may change jobs, or be laid off and lose your insurance. The premium may rise so much that you can no longer afford it. Coverage that’s guaranteed wherever (or whether) you work requires insurance that covers people based on U.S. residency rather than employment, like Rep. Pramila Jayapal’s (D-Wash.) Medicare for All Act of 2019.
Should I worry that taxes will go up? With Medicare for all, taxes will replace rising premiums, copays and deductibles.
These taxes will be progressive. The more you earn, the higher rate you pay. That’s fairer than charging for health insurance based on age, without regard to income, like now. The Affordable Care Act provides premium subsidies for some poorer people, but not for all and requires high deductibles and copays. For most people, the new taxes for health care will be less than what they currently pay in premiums and out-of-pocket costs. Low and middle-income families will save money. High-income families will pay more.
Should I fear losing choice of doctor? Sadly, we already have. Unless you’re on traditional Medicare, you can’t choose any doctor or hospital you like (except if you pay the costs yourself). Some presidential candidates say the choice worth making is between health insurers. Isn’t it more important to choose the doctor and hospital that provides your care, as permitted under Medicare for all?
Now, let’s compare the candidates’ plans. There are three approaches (see side-by-side table):
Medicare for all (single payer) provides coverage for life, regardless of health, wealth, or work status. Everyone has a comprehensive benefit package, accepted by all doctors. A public agency directly pays doctors and hospitals’ negotiated rates. Medicare for all combines superb coverage with lower costs. How? By simplifying every aspect of insurance, from enrollment to coverage to billing.
This results in massive administrative savings ($400-500 billion per year) and lower drug prices. How we pay for health care would also change. Taxes would rise, especially on the wealthy, but premiums and out-of-pocket costs would disappear. Most importantly, health care would cost our society less — 5 to 8 percent less in most studies, while covering everyone.
Public Option (or Medicare expansion) means we keep the current super-complex mix of private and public plans, while letting some people buy into Medicare. This protects private insurance companies, and so keeps the bad stuff — restricted doctor networks, deductibles and copays, and administrative bloat.
Medicare Advantage for all: Sen. Kamala Harris (D-Calif.) recently proposed an approach based on Medicare Advantage, the HMO part of Medicare. This assures a large role for private insurers. Thus, it has most of the same drawbacks as the Medicare public option, with few savings opportunities. It would leave private insurers and all their unnecessary expenses burdening Americans for another decade.
Is Medicare for All “fairytale economics,” as former Rep. John Delaney said? It’s a system widely used in other countries — and works incredibly well. The real fairy tale is that we can still afford insurance middlemen taking a cut out of our health-care budget.
Is it too drastic? During the Great Depression, we launched America’s biggest social insurance program: Social Security. It’s a great example of how the government can protect us against economic risk and improve our lives. Medicare for all is a grand solution in a grand American tradition. This kind of health-care reform is not only possible, it’s essential.
James G. Kahn, M.D., is an emeritus professor of health policy at the University of California San Francisco. Elliot Marseille, Dr.P.H., is CEO of Health Strategies International.