U.S. House of Representatives, Committee on the Budget

January 8, 2019

Dr. Keith Hall
Director
Congressional Budget Office
Washington, DC 20515

Dear Dr. Hall:

The Affordable Care Act substantially increased the number of Americans who have health insurance and created important consumer protections, such as caps on out-of-pocket costs and prohibiting discrimination against people with pre-existing conditions. However, millions of Americans remain uninsured, and millions more – even though they have insurance – struggle to afford their health care costs. Many members of Congress are considering new approaches to achieve the goal of affordable, high-quality coverage available to everyone. There are several possible pathways toward this goal, ranging from incremental improvements to the Affordable Care Act to a more comprehensive overhaul of the nation’s health care system. One approach that has garnered considerable interest is a single-payer system. Supporters often point to the experience of other countries that have achieved near-universal coverage through single-payer systems. The single-payer systems in other countries differ in important respects, however, and do not necessarily provide a clear blueprint as to how such a system in this country would be designed. Members of Congress developing proposals to establish a single-payer system will face many important decisions that could have major implications for federal spending, national health care spending, and access to care.

To assist Congress with that work, I request that the Congressional Budget Office provide a report on the design considerations that policymakers would confront in developing proposals to establish a single-payer system in the United States. The report would cover the following issues: how the system would be administered; who would be eligible for coverage and how they would be enrolled; what services would be covered and what cos-sharing requirements, if any, would be imposed; what role, if any, private insurers would play; whether other public programs (such as Medicaid, the Veterans Health Administration, the Indian Health Service, and the Military Health System) would continue to exist; how provider payment rates would be established; what participation rules would be established for providers; what methods would be used to contain costs; and how the system would be financed. The report would not necessarily provide CBO’s estimate of the effects of any particular proposal for a single-payer system on federal spending to national health care spending but would, to the extent feasible, provide a qualitative assessment of how the choices with respect to major design issues would affect such spending. The staff contact for this request is Erika Appel, who can be reached at (number omitted to avoid a deluge of calls – DMc).

Sincerely,

John A. Yarmuth
Chairman

Comment:

By Don McCanne, M.D.

Speaker of the House Nancy Pelosi has already stated that the Budget Committee would be holding hearings on Medicare for All. This letter indicates that the process has already begun since the committee does need basic information on what a single payer system is, and the nonpartisan Congressional Budget Office (CBO) serves as an impartial resource for such information. The fact that single payer Medicare for All is now receiving formal consideration in Congress is an important milestone in our journey toward health care justice for all.

Concerns are already being expressed over the background of Keith Hall, the Director of the CBO, who is a Republican and was the chief economist for the White House Council of Economic Advisers under George W. Bush, and was a senior research fellow at the Mercatus Center at George Mason University – a free-market oriented institution that recently released a report critical of Sen. Bernie Sanders’ Medicare for All legislation.

The probability is that the report will be credible since the CBO staff has continued to demonstrate professional integrity and impartiality regardless of the political inclinations of the director. Prior CBO controversies such as the application of dynamic scoring likely will not play a role here. In the unlikely event that they digress and redefine single payer as a more conservative or libertarian model, or if they distort socialist features as being a nefarious route to totalitarianism, the uprising by Medicare for All activists would put their report to rest. But that won’t happen. Likely, at the very worst, we might have to correct some minor distortions or errors, and we do have the credibility to do that. Furthermore, this is only a report and not legislation. The real test comes when the final, definitive legislative is crafted.

Whether or not the report turns out to be useful, we already have a plethora of health policy data that can guide Congress as they create the design and transform it into legislative language. Whatever bill(s) may be produced will have plenty of exposure during this session of Congress, allowing for our input to perfect them for the next session of Congress when we may finally have a real chance of achieving our goal of Medicare for All.

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Office of Governor Gavin Newsom, January 7, 2019

In his first act as California’s 40th Governor, Governor Gavin Newsom announced a series of major, first-in-the-nation executive actions and budget proposals to lower prescription drug and health care costs for all California families and move California closer to the goal of health care for all.

(The Governor) Calls on the federal government to empower California to truly innovate: Governor Newsom has long said California should be the national leader in health care innovation. However, instead of cultivating and rewarding good ideas, current federal law hinders truly transformative innovation, such as a single-payer health care system. Governor Newsom sent a letter today to President Trump and Congressional leaders calling on the federal government to lift these limitations and, instead, empower states like California to enact transformative change that would allow California to develop a single-payer health system to achieve universal coverage, contain costs, and promote quality and affordability.

https://www.gov.ca.gov…

Office of the Governor, Letter, January 7, 2019

The Honorable Donald J. Trump
The Honorable Mitch McConnell
The Honorable Charles E. Schumer
The Honorable Nancy Pelosi
The Honorable Kevin McCarthy

(Brief excerpts from a 6 page letter)

Existing law permits only limited, piecemeal innovation – not the comprehensive reform necessary to address the myriad challenges that Californians face when navigating today’s health care system.

However, to address this ongoing cost crisis in health care in the most effective way, we must have the federal tools to support California’s ability to provide quality healthcare for everyone, financed through a single-payer model like Medicare. We must have the tools to innovate and expand the Affordable Care Act. even as we build towards a more comprehensive, universal system that works for patients, providers, and taxpayers alike.

A comprehensive solution to affordable health care will require both wisdom and courage, with States and the federal government working together as partners. First and foremost, I ask that you amend federal law to enable States to apply for Transformational Cost and Universal Coverage Waivers, empowering California to pursue transformative health care reform, such as a single-payer system. Further, I ask that you build on the progress of the Affordable Care Act, especially by bolstering the affordability provisions of the law.

Sincerely,

Gavin Newsom, Governor of California

https://www.gov.ca.gov…

Comment:

By Don McCanne, M.D.

Various federal policies and programs have prevented states from accomplishing transition into a state-level single payer system. In his first action, moments after his inauguration, Governor Gavin Newsom signed an executive order to create the largest single purchaser for prescription drugs and allow private employers to join the state in negotiating drug prices. Immediately after that, he signed a letter to the President and Congress asking that federal law be amended to permit a single payer financing system, like Medicare, in California. The letter also requested numerous innovations that would build on the progress of the Affordable Care Act.

There should be no confusion about priorities here. The political climate has improved for enactment of a national Medicare for All program, though not until after the next elections. Every effort should be made to set the stage for such an outcome. Because of the uncertainties of being able to accomplish that goal, willing states like California should move ahead with efforts to establish their own single payer systems, such as Saskatchewan did in Canada before the Canada Health Act was enacted. Since there are also uncertainties about the politics of establishing state single payer programs, it is appropriate to move forward with efforts to strengthen the benefits of the Affordable Care Act on a transitional basis. The primary caveat is that that we cannot allow lesser efforts to diminish in the least our resolve to establish a national Single Payer Medicare for All program. If the politics are not aligned, we need to change them.

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By Mark Moore
New York Post, January 6, 2019

Rookie Rep. Alexandria Ocasio-Cortez shot back at critics who say her progressive agenda is too radical and expensive, saying there’s nothing revolutionary about providing people with good jobs, health care and an education.

“When you can’t provide for your kids working a full-time job, working two full-time jobs. When you can’t have health care. That is not dignified,” Ocasio-Cortez told CBS’ “60 Minutes” in an interview that aired Sunday.

The 29-year-old newly minted House member is entering office with an ambitious agenda — including Medicare for all, tuition-free public college, and sweeping environmental protections.

“How are you going to pay for all that?” CBS’ Anderson Cooper asked her.

“No one asks how we’re going to pay for this Space Force. No one asked how we paid for a $2 trillion tax cut,” she said. “We only ask how we pay for it on issues of housing, health care and education. How do we pay for it? With the same exact mechanisms that we pay for military increases for this Space Force.”

https://nypost.com…

Selected prior analyses of single payer financing proposals:
https://pnhp.org…

Comment:

By Don McCanne, M.D.

We tend to try to provide an overly detailed answer when people ask how we would pay for health care for everyone through a single payer Medicare for All program. The appropriate answer in most circumstances is that we would pay for it like we do for all other publicly-financed programs – through equitable tax policies which would be affordable for each of us, less than most of us are paying now.

For more specific details, over the past three decades many single payer financing proposals have been analyzed (see link above). The recent Pollin PERI study is another example. They all show that the single payer model covers everyone while making health care affordable for each of us. That is what people need to know. Inevitably, opponents ferret out isolated details, which vary in each proposal, that are used to claim that the system is unaffordable while they fail to mention details of the fundamental design that, in fact, show that health care actually would be affordable for all.

Regardless, we should avoid dead end arguments over the specific details of these reports. We should hold firm on the general position that the efficiencies of a single payer system would offset the additional costs of covering everyone, and that it would be affordable for each of us through equitable public financing. Like Alexandria Ocasio-Cortez says, “we pay for it with the same exact mechanisms that we pay for (any other government program).”

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By Peter Sullivan
The Hill, January 3, 2019

Speaker Nancy Pelosi (D-Calif.) supports holding hearings on “Medicare for all,” her spokesman said Thursday, marking a major step forward for supporters of a single-payer health system.

Some Democrats have been talking about holding hearings on the issue, but Pelosi’s backing is seen as a boost for those efforts.

Pelosi had said last year only that Medicare for all would “have to be evaluated” and is “on the table.”

Rep. Pramila Jayapal (D-Wash.), the main sponsor of Medicare for all in the House, said Thursday that hearings would likely start in the Rules and Budget committees.

That would leave out the main committees with jurisdiction over the issue: Energy and Commerce and Ways and Means. The chairmen of those committees have not given their backing to Medicare for all, while the chairmen of Rules and Budget have.

Jayapal has been working to update the Medicare for all legislation and said Thursday she hopes to have draft text available “in the next week or two.”

She said she is hoping to eventually have hearings in the Energy and Commerce Committee, and has spoken to its chairman, Rep. Frank Pallone Jr. (D-N.J.), but that he has yet to give a commitment to hold hearings.

“He hasn’t committed that to me but I have the Speaker’s commitment that she will help me to do this,” Jayapal said. “And I spoke to Pallone and Pallone is not opposed, he just hasn’t said yes yet.”

Pallone threw cold water on the idea in November, but that was before Pelosi’s support for hearings.

“I’ve always been an advocate for Medicare for all or single-payer, but I just don’t think that the votes would be there for that, so I think our priority has to be stabilizing the Affordable Care Act, preventing the sabotage that the Trump administration has initiated,” Pallone said in November.

Jayapal said that the bill she is working on will not spell out how the measure would be paid for or which taxes will increase.

“This is really going to be a bill on what the system looks like,” she said.

Some lawmakers are awaiting the details of the new version.

Rep. Joe Kennedy III (D-Mass.) told The Hill in November that he was “hopeful” he could support the new version if issues with last year’s bill were worked out.

(In an 11/30/18 article in The Hill, Kennedy said that the bill needs more vetting and detail, but that he “absolutely” supports the idea of single-payer health insurance, which has the government provide health insurance for everyone. “There’s no doubt that our country needs to continue this progress towards making sure that everybody gets access to health care that you need, when you need it, at a price you can afford,” he said. “That has been something that’s one of the big driving motivators for me in my work here, it’s been something that obviously members of my family have been working on for a very long time.”)

Rep. John Yarmuth (D-Ky.), the chairman of the Budget Committee, said last year that he planned to hold hearings on Medicare for all.

“Chairman Yarmuth plans to hold a hearing this Congress on the various approaches to expanding coverage and making health care more affordable, which would include different Medicare for All options,” spokesman Sam Lau said Thursday.

Rep. Richard Neal (D-Mass.), the Ways and Means chairman, has been more open to the idea, saying in December that Medicare for all deserved “a conversation.”

Democrats, however, face pressure from their left wing on the issue, not only from Jayapal but from a class of new members including incoming Rep. Alexandria Ocasio-Cortez (D-N.Y.).

https://thehill.com…

Comment:

By Don McCanne, M.D.

The political process is evolving as it should. Every seat in the House was open for the midterm election, and the voters placed control of the House in the hands of a majority that supports comprehensive health reform, with many supporting specifically Medicare for All. It is entirely appropriate for the House to now initiate hearings on Medicare for All. Many voters and certainly several members of Congress would like to have more details on what Single Payer Medicare for All would look like and how it would work. The hearings thus can serve an important role in educating Congress and the public at large.

Since President Trump and the majority in the Senate state that they oppose Medicare for All, it is unrealistic to expect that such a program could be enacted in this session of Congress. But the next election is less than two years away and that is a very short time to inform and mobilize the political forces that would be essential for enabling enactment of Medicare for All.

The hearings will be part of the process, but it is important that we continue with our other advocacy activities as well. Special targets should include politicians who do not yet seem to understand why single payer is an imperative, and politicians who profess to be advocates but who could be swayed to support detrimental reform policies in a perversion of the process of political compromise. We need to continue to work with politicians who are already fully on board, but we should also continue our efforts to educate those who say they are opposed, if, for no other reason, they might accept defeat more readily were they to understand the clear social benefit of Medicare for All. Also we cannot let up in the least in our efforts to educate the public at large. Grassroots efforts will continue to be an essential component of the reform effort.

As a 501(c)(3) organization, PNHP does not support any individual politician or political party. We encourage all politicians, regardless of political affiliation, to learn about and support a single payer national health program, an improved Medicare for all, that would ensure comprehensive, affordable health care for everyone.

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By Chad Terhune
Kaiser Health News, January 3, 2019

Marcela Villa isn’t a big name in health care — but she played a crucial role in the lives of thousands of Medicaid patients in California. Her official title: denial nurse.

Each week, dozens of requests for treatment landed on her desk after preliminary rejections. Her job, with the assistance of a part-time medical director, was to conclusively determine whether the care — from doctor visits to cancer treatment — should be covered under the nation’s health insurance program for low-income Americans.

She was drowning in requests, she said, and felt pressed to uphold most of the denials she saw. “If it was a high-dollar case, they tried to deny it,” Villa said. “I told them you can’t deny it just because it’s going to cost $20,000.”

Villa, 32, did not work for the government. She did not even work for an insurer under contract with the government. She worked for a company now called Agilon Health. Owned by a private equity firm, it’s among the legion of private subcontractors looking to profit from Medicaid patients.

California’s Medicaid program, known as Medi-Cal, has determined that the Long Beach company, which was paid to coordinate care for about 400,000 patients, improperly denied or delayed care for at least 1,400 of them, state officials confirmed. The state Department of Managed Health Care is investigating further.

The state findings, along with internal company documents and a whistleblower complaint obtained by Kaiser Health News, shine a light on the potential dangers of outsourcing care for poor people. Government oversight, not rigorous to begin with, fades as taxpayer money filters down through layers of companies eager to seize on Medicaid’s substantial growth under the Affordable Care Act. Medicaid officials say they have authority only over the health plans, not their subcontractors.

Skimping On Services?

Nearly three-quarters of the 73 million low-income Americans on Medicaid are now in managed care, in which states pay health insurers fixed monthly amounts for each enrollee to cover the range of services they need.

Under this system, keeping patients as healthy as possible is one way to make money. Another is to deny or skimp on services.

Increasingly, Medicaid plans outsource the work of managing patients’ health and medical treatment to subcontractors like Agilon — passing along a share of the government money coupled with the financial risk posed by a fixed budget.

These firms can be powerful gatekeepers. They run physician groups, bear responsibility for forming doctor networks and judge whether a request for care is necessary.

Agilon is a big player in California — doing business with insurers such as Molina Healthcare and Blue Shield of California.

Agilon’s June report depicts an operation that was often stretched thin: Nurses were handling 120 to 200 requests for care per day, on average, with no full-time medical director to review the findings.

From 2014 until May, the company relied on a family physician who was working 10 to 12 hours a day running his own medical practice, according to the report.

Ultimately, Agilon’s internal investigation found that patient care may have been denied 439 times since 2014 without a physician’s review of the medical records — a potential violation of state law. Under California law, only a licensed physician or health care professional who is “competent to evaluate the specific clinical issues involved” can determine medical necessity.

“These private entities get very little oversight,” said Linda Nguy, a policy advocate at the Western Center on Law & Poverty in Sacramento, “and there’s real harm being done to patients.”

https://khn.org…

Comment:

By Don McCanne, M.D.

Private Medicaid managed care companies using private subcontractors to appropriate to themselves our public funds by denying health care – need we say more?

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By Doug Henwood
Jacobin, December 26, 2018

How much will universal health coverage cost? The Mercatus Institute, a Koch-funded free-market think tank at George Mason University, recently put it at $32 trillion over the next decade. That sounds like a lot, but is it?

Well, the study also estimated that the cost was $2 trillion less than it would cost to do just the same thing as we are now — which is surprising considering the source, but much less interesting to mainstream reporters.

But the Political Economy Research Institute at the University of Massachusetts has its own estimates. Its long and rigorous study shows we could cover everyone in the United States with no copays and cut overall health spending by almost a fifth. Lead author Robert Pollin, professor of economics at the University of Massachusetts and co-director of PERI, recently spoke with Doug Henwood for his Jacobin podcast Behind the News.

Doug Henwood: You’re projecting over the long-term that US health care expenditure would stabilize around 15 percent or 16 percent of GDP. Which is still well above what we see in Canada and Britain, and quite above also Germany and France, who spend more than Canada and Britain.

We’re talking about a difference of a trillion or more dollars, which is enough to save the climate and have enough left over for dessert. Why can’t we get down to those levels?

Robert Pollin: Very good question. We really wanted this study to be really heavily peer reviewed. One reviewer was Jeffrey Sachs, who was extremely active and very helpful, and was quite critical in some points. This was his main question. “If we’re going to do all of this, we end up with a system that is going to cost 16 percent of GDP. Why can’t we do better, if Canada and the others are 11 percent, 10 percent, 9 percent?”

Some of the other reviewers I have were pushing on the other side, saying, “You can’t make these cuts. It’s unrealistic to think you’re going to get this level of savings.” On balance, this is where I think is realistically we can get to.

Henwood: We have this coalition now developing in Congress of Democrats opposed to any idea of single-payer, so not obvious at this point.

Pollin: Well, not obvious. But 70 percent of the population says they’re for it.

The argument was for a long time, “Yeah, you may be for it, but you don’t know what the hell it is and you can’t pay for it.” I hope that my study and other people’s studies have demonstrated that that simply isn’t true. It was obvious all along that it wasn’t true — other countries are paying a lot less, and they have some equivalent to Medicare for All.

But in the US case, now we have these various studies, including ours, that make it blindingly clear that this is completely practical, and the financing works. It works way better for almost everybody in society. It relieves people of all the anxieties they have about how they cover themselves when they have health problems. It’s a much better way to run a health care system.

On the other side, you have people making tons of money off of a bad health care system. That’s what we are going to struggle over.

https://www.jacobinmag.com…

U MASS PERI Analysis:
https://www.peri.umass.edu…

Reviewer Assessments, including that of PNHP’s Woolhandler, Himmelstein, and Gaffney:
https://www.peri.umass.edu…

Comment:

By Don McCanne, M.D.

Those passionate about single payer have been energized by the expanding public support for Medicare for All and by recent policy studies such as that by U MASS-Amherst Professor Robert Pollin and his colleagues, and also particularly by the fact that legislative models are in development on both the state and federal levels. But there are disputes about both policy and process.

Once you exclude those who oppose a government role in ensuring health care for all, the primary disagreement on policy is whether we want to build on our current dysfunctional model of financing health care or if we want to move forward with Single Payer Medicare for All. There is really no contest since the single payer model wins out based on effectiveness, efficiency, accessibility in a system that is both affordable and equitable. Building on the current system by measures such as adding a public option or Medicare buy-in doesn’t come close; lack of insurance, underinsurance, impaired access, and financial hardship would be perpetuated. There are still some differences of opinion regarding details of the single payer model, but this can be worked out cooperatively. What is clear is that expanding the current system is not adequate.

What about process? Above all we need to work with legislators and their staffs and others in the policy community who will be providing input into the legislative process. But in our passion it is essential that we not forget about the importance of civility.

Before Pollin’s team released their analysis, they had it reviewed by several other noted individuals from the policy community (link above). Although not all differences were resolved, the various opinions were advanced for consideration by the community at large. This process includes the crucial ingredient of civility. Without it, the process breaks down, as our highly polarized members of Congress demonstrate repeatedly.

When the legislation needs to be protected against flawed or harmful policies, working together with our colleagues to educate the legislative staffs will get us much further than bombarding them with what appears to them to be the product of uncooperative dissidents. Again, when we are clearly in the right, civility will pave the way.

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