The Hill reports that Vermont Senator Bernie Sanders to unveil ‘Medicare for all’ bill on Wednesday:
The advisory from his office says that Sanders will be joined by Senate co-sponsors, though does not list who they are. He will also be joined by “medical professionals, business leaders, and patients.”
The issue has emerged as a key test for 2020 Democratic presidential hopefuls.
In fact, the Washington Post reports today that The dam is breaking on Democrats’ embrace of single-payer:
Sen. Cory Booker (D-N.J.) became the fourth co-sponsor of Sen. Bernie Sanders’s (I-Vt.) “Medicare for all” health-care bill Monday. In doing so, he joined Sens. Elizabeth Warren (D-Mass.) and Kamala D. Harris (D-Calif.).
What do those four senators have in common? Well, they just happen to constitute four of the eight most likely 2020 Democratic presidential nominees, according to the handy list I put out Friday. And another senator in my top 8, Kirsten Gillibrand (D-N.Y.), last month came out in favor of the idea of “Medicare for all” — though not this specific bill (yet).
This is about as far from a coincidence as you can get. And it suggests the dam is breaking when it comes to the Democratic Party embracing government-run health care, also known as single-payer.
There are 48 members of the Democratic caucus in the Senate. That four of the first five to come out in support of Sanders’s bill all came from a relatively small universe of top presidential hopefuls suggests that this will be a litmus test issue in 2020. And any hopeful that doesn’t support it is going to stand out like a sore thumb. (The fifth was Rhode Island Sen. Sheldon Whitehouse, and Oregon’s Jeff Merkley joined the growing group shortly after Booker on Monday afternoon. Merkley and Whitehouse have also been mentioned as dark-horse 2020 hopefuls.)
It also seems to confirm that these senators have clear designs on running. The last thing any of them want is to see another candidate get to their left on this, so each of them are quick to go on-record — much quicker than their not-eyeing-2020 colleagues who can afford to be more judicious and deliberate. The bill hasn’t even been introduced yet; that’ll come Wednesday.
Before “group think” sets in and leads everyone to jump aboard the “Medicare For All” plan, there should be some sober policy consideration of alternative plans that may actually achieve the same goal. as Margot Sanger-Katz cautions, Medicare for all” could become a dead end that trips up Democrats like “repeal and replace” did for the GOP. How Single-Payer Health Care Could Trip Up Democrats. There is more than one way to skin a cat.
Dylan Matthews at Vox.com explains, This old bill could be the secret to affordable universal health care:
One by one, Democrats are moving on from the Affordable Care Act. And increasingly, they’re embracing a full transition to a single payer system as an answer.
Bernie Sanders has been touting a Medicare-for-all plan for decades, of course, and gave the issue new prominence in last year’s presidential primaries. But he’s gaining company. His single-payer plan is cosponsored by Sens. Kamala Harris (D-CA), Elizabeth Warren (D-MA), Cory Booker (D-NJ), and Kirsten Gillibrand (D-NY), among several other leading figures in the national party. The odds that the party’s 2020 presidential nominee will be one of these people, and will thus support single-payer, are quite high.
In the House, HR 676, Rep. John Conyers’ (D-MI) bill to establish a nationwide single-payer program, has 117 cosponsors, nearly double the number the same bill received in 2015-2016. The cosponsors represent well over half the Democratic caucus. At the state level, the California State Senate has approved a bill calling for the creation of a single-payer plan in the state.
But the most ambitious single-payer plans are probably dead in the water. The California, Sanders, and Conyers bills call for extraordinarily generous benefits that outstrip those offered by most real-world countries with universal health care. California’s bill, for instance, would have the state pay for all long-term care, nursing homes, dental, and vision, none of which the single-payer system in, say, Canada typically pays for (it doesn’t even pay for prescription drugs or therapy sessions with psychologists).
That adds up. California’s plan would cost $400 billion a year, according to an analysis by the State Senate Appropriations Committee, half of which would have be funded with huge increases in broad-based taxes. The committee estimated that paying for the plan with a payroll tax would require a rate of 15 percent. Much of that tax would be replacing current spending on health insurance premiums, but voters don’t appear willing to accept a tax hike that large all the same. In 2016, Colorado went for Hillary Clinton by five points, but voted down a ballot initiative creating a single payer plan by 79 percent to 21; the plan would’ve been paid for by a 10 percent tax on both payroll and other income.
Thankfully, there is another way to achieve universal coverage, and move decisively toward single-payer, either federally or at the state level, one which doesn’t require sudden massive tax increases.
In 2006, Rep. Pete Stark (D-CA) introduced the AmeriCare Health Care Act, and it appears that Sen. Chris Murphy (D-CT) is planning on sponsoring and releasing a very similar bill soon. AmeriCare provides a much more promising path toward universal coverage than the Conyers or Sanders plans. It wouldn’t force employers or employees to abandon their plans overnight, and would cost a sizable but manageable amount every year. In many ways it’s truer to Yale political scientist Jacob Hacker’s Health Care for America Plan, which inspired the Affordable Care Act, than the law itself is.
Americare could also easily be adapted for use by a single state. It was partially inspired by a plan designed for California specifically by Berkeley professor Helen Halpin, called the CHOICE Option, and can be thought of as a more aggressive version of the Medicaid-for-all plan that passed the Nevada legislature this year, and which Sen. Brian Schatz (D-HI) has proposed nationally.
If Democrats want to get to universal coverage, and ultimately to single-payer, this, not a big-bang approach like the California bill, is the way to do it. And there’s no reason Democratic-dominated states like California, Connecticut, Maryland, or Oregon couldn’t get started right now.
How AmeriCare works
You can think of the AmeriCare approach as a public option on steroids. It would create a new single-payer program called AmeriCare that would take on everyone ensured by Medicaid and SCHIP, and would automatically enroll all children at birth. It would pay the same rates to providers as Medicare, meaning it’d be considerably less generous to doctors and hospitals than private insurers.
AmeriCare involves cost sharing very similar to what you’d find in a private plan, but more affordable. There are deductibles ($350 for individuals, $500 for families), co-insurance (20 percent of spending above the deductible), an out-of-pocket spending cap ($2,500 for individuals, $4,000 for families), and premiums.
However, cost sharing would be sharply limited for low-income families. Individuals and families living on less than twice the poverty line ($48,500 for a family of four in 2015) wouldn’t have to pay premiums, deductibles, or co-insurance, and there would be premium subsidies and lower deductibles for people between two and three times the poverty line.
Here’s the kicker: Employers could buy into the plan. They’d have to pay 80 percent of the premium, leaving 20 percent to employees, but it’d be an alternative every company got to their existing private plan.
The nonprofit Commonwealth Fund hired the Lewin Group, a widely respected health care policy research group, to look at the AmeriCare proposal and other congressional plans in 2007 and 2009. The Lewin Group concluded both times that the vast majority of employers would switch their plans to the new government program.
In the latter analysis, they found that over time as employers adjusted to the new reality, 85 percent of Americans would ultimately be insured in AmeriCare, 10 percent in Medicare, 3 percent would be eligible for multiple government programs, 2 percent would be in the military’s Tricare system, and a mere 1 percent would still have private insurance.
AmeriCare doesn’t eliminate the private insurance system, but it does make it small enough to drown in a bathtub.
But here’s the thing: Lewin finds that AmeriCare would take over because they assume that almost every employer would choose it over private insurance, because it’d be so much cheaper. “The combination of lower administrative costs and lower provider payment rates under Medicare makes Medicare coverage very attractive to employers,” Commonwealth’s Karen Davis wrote in 2007, using “Medicare” to refer to the new AmeriCare program. “When given the choice, most employers would purchase coverage for employees through Medicare.”
AmeriCare could build on Obamacare
The Lewin Group produced two cost estimates for AmeriCare, finding it would cost the federal government an additional $188.5 billion per year in 2010 and an additional $154.5 billion per year in 2007. Health care costs have grown since then; if you assume that the cost of AmeriCare would grow at the same rate that health spending as a whole is projected to grow from 2010 to 2017, you get a number more like $260 billion a year.
That would require nontrivial tax increases, but nothing like the huge hikes that a traditional single-payer plan would require; you could hike the Medicare payroll tax by a few points (maybe exempting poverty wages) and raise estate and income taxes for the rich and easily cover it. Moreover, these estimates predate Obamacare, which further cut Medicare provider payments, expanded Medicaid in a way similar to AmeriCare’s no-cost-sharing option for the poor, and added a bevy of new taxes. Once those are taken into account, the cost becomes even lower.
What’s more, AmeriCare gains all the normal benefits from single-payer: cheaper administration, bargaining power over prescription drugs, and lower payment rates to providers. In total, it would’ve reduced health spending by $58 billion in 2010 per the Lewin Group’s analysis.
You’d have to restructure AmeriCare considerably to fit a post-Obamacare world. It would probably take the form of a subsidized public option offered on health insurance exchanges, combined with legislation opening up the exchanges to all employers (not just those with 50 employees or fewer), auto-enrolling newborn children, and nationalizing Medicaid/SCHIP so obstructionist states can’t deny their residents coverage by rejecting federal funds.
But this restructuring just makes the Americare approach more viable. It builds on, rather than replaces, the existing health care system in a way that pushes it inexorably toward single-payer.
Why we need AmeriCare
AmeriCare isn’t an easy plan to get through Congress. It would face fervent opposition from doctors who fear lower payment rates, from a health insurance industry that knows AmeriCare will shrink its role dramatically, and from a pharmaceutical industry that doesn’t want the federal government to negotiate drug prices. It would be very, very hard legislation to pass.
And, obviously, Paul Ryan and conservatives in Congress will fight this idea like hell. In the extremely unlikely event that it happens it’d require Democratic support.
But AmeriCare is an affordable way to achieve universal coverage. Democrats would do well to coalesce around it as the best way to build on the Affordable Care Act and work toward making health care a right in America.
Democrats should want to achieve their generations-long policy goal of universal health care coverage through pragmatic means that the public is open to accepting and supporting. All policy options should be fairly considered, and no political “litmus test” for a particular plan should color this policy debate.
UPDATE: Nancy LeTourneau at the Political Animal blog has a good summary of the several options, including Sen. Brian Schatz (D-HI) plan to allow anyone to purchase Medicaid as a public option on the existing exchanges. A Robust Debate on Options for Getting to Universal Coverage.