A Robust Debate on Options for Getting to Universal Coverage

A few weeks ago I quoted something Harold Pollack wrote that bears repeating when it comes to the discussion among Democrats about further reforms to our health care system.

Given the ill-will and recrimination, it’s easy to forget that this is a fight among friends and allies about how best to pursue shared goals and values. Much of the internal Democratic Party debate confuses instrumental operational questions with questions of core principle. By which I mean, to put it more simply: Single payer is not, in itself, a principle. It is one way to organize health-care financing. A regulated patchwork of private insurers undergirded by public subsidies and the individual mandate is another. In other words, these arrangements are means to an end, not ends themselves. After all, most American progressives would be thrilled to see the Dutch or German health-care systems enacted here, though neither of these is actually single payer in the sense that Medicare is.

The end—the core principle at stake—is universality. A wealthy and humane democracy must provide decent health coverage to everyone—coverage that actually works to prevent and treat serious illness, injury, and disability. On this principle, progressives are in total agreement. We’re no longer debating the goal of universal coverage. We’re debating how to get there. And it’s important to remember that.

A lot of the discussion has focused on Democrats who have signed on to endorse either Rep. Conyer’s single payer plan in the House or the one Sen. Sanders is scheduled to release this week. Not getting as much attention is the fact that, with the goal of universal coverage being the end-game, a wealth of options are beginning to surface. If Democrats can approach this stage with an openness to new ideas rather than attempt to impose a litmus test for candidates on the one that they endorse, it will lead to a very healthy and productive discussion.

In that spirit, I thought it might be helpful to take a look at some of the various ideas that are being generated.

Single Payer

While the presidential campaign of Bernie Sanders put this option in the limelight, a lot of people don’t know that Rep. Conyers has been proposing a single payer plan in the House for decades now. Jeff Stein provides a good analysis of this plan, including the fact that 117 Democrats have signed on as co-sponsors. It would do away with private insurance and set up a system by which the federal government would pool current expenditures on health care (except VA insurance) and provide comprehensive coverage to everyone in the country within two years of the bill passing. Conyers’s plan includes an outline of revenue sources that would be needed beyond what the federal government currently spends on health care. But it doesn’t attempt to document what such a program would cost or the amount of funding that would be generated.

The benefit of such a plan is that it gets to an end goal—universal coverage with the federal government as the “single payer”—almost immediately. Beyond that, it is assumed that, as the only insurer, the government would have leverage to negotiate cost controls with providers. By decoupling health insurance from employment, people would be free to change jobs without worrying about the impact on their coverage.

There are two major downsides to implementing this as the next step in health care reform. The first is that it would be incredibly disruptive. Over 150 million people in this country (approximately 47 percent) currently get health insurance via their employers and would be required to change to the government plan. That kind of shift over two years is probably unrealistic. By contrast, Obamacare, which affected a much smaller number of people, was phased in over four years.

The other downside to Conyers’s plan is the one that has bedeviled single payer advocates in Vermont and California: how to structure the shift in such massive revenue sources from the hodgepodge of our current system to an equitable tax structure to pay for it. That challenge, plus the one about requiring people who are happy with their current employer-based coverage to give it up, are what opens the door to a huge backlash against a sudden move to single payer.

While Bernie Sanders has adopted the slogan “Medicare for All” to describe the plan he will release this week, it will probably look much more like Conyers’s plan in that Medicare is actually reliant on supplemental private insurance. As we look at other plans various people are proposing, it is interesting to note that no one has actually proposed a “Medicare for All” plan…yet.

The remainder of proposals sacrifice getting to universal coverage immediately in favor or minimizing the disruption by allowing people to buy into federal programs as a choice. Underlying all of them is the assumption that these options will prove to be advantageous to consumers and will thereby not only expand coverage, but provide a pathway to the goal of universal coverage.

Medicaid for More

Sen. Schatz (D-HI) has introduced a plan to allow anyone to purchase Medicaid as a public option on the existing exchanges. I recently wrote about the benefits of such a proposal. The downside to this one is that Medicaid is administered by the states. But that could also be one of its biggest strengths.

Perhaps most crucially, individual states are already free to adopt a Medicaid buy-in approach, so long as they get federal permission to do so. And several state legislatures are considering exploring the Medicaid buy-in strategy. There is no need to wait for a Democratic takeover of the presidency and Congress — both of which are necessary ingredients of a federal Medicare expansion.

Medicare Buy-In

Several people have introduced proposals that would allow Medicare buy-in. For example, while running for president, Hillary Clinton adopted the idea of allowing people 55-64 years of age to buy into the program. Joel Dodge proposed “Medicare for Kids.”

One place to start is by providing government-run health insurance to all American children. Children could be auto-enrolled in Medicare coverage at birth until some point in early adulthood, perhaps age 26—the current cutoff for children to stay on their parents’ insurance. Families would have the option of opting out of Medicare for their children in favor of employer-sponsored coverage or another suitable private plan.

Sen. Murphy (D-CT) has proposed a more expansive plan. Similar to the Schatz proposal, he plans to introduce a bill that would allow anyone to purchase Medicare as a public option on the exchanges. These two proposals should ignite a discussion about the pros and cons of Medicaid and Medicare as vehicles for building towards universal coverage.

  • As they are currently administered, both programs include the involvement of private insurers.
  • Medicaid currently provides the kind of comprehensive coverage envisioned by the single payer plans that have been proposed, while Medicare includes co-pays and deductibles.
  • The federal government pays most of the costs of Medicaid, but it is administered by the states. Medicare is a federally administered program.
  • Medicaid pays providers less than Medicare, which currently pays less than private insurers.

One of the benefits of both the Schatz and Murphy plans is that they build on the current Obamacare exchanges. This not only makes it easier for individuals to compare/contrast their options in a one-stop-shop format, it also incorporates the Obamacare subsidies for those who are eligible.

Medicaid/Medicare/VA Buy-In

Steve Waldman combined some of these ideas and suggested that we allow people to buy into all federal programs.

First, require that states allow anyone to buy into Medicaid, with premiums tied to income.

Second, make all veterans, not just those with service-related medical conditions, eligible for VA care, and allow their spouses and children to buy into it as well. Politically, veterans’ groups would probably welcome this idea, because it would shore up demand for veterans’ facilities that is currently declining along the number of veterans.

Third, do as Clinton suggested and let Americans aged fifty and older buy into Medicare.

The addition of making all veterans eligible for VA care puts another potential “single payer” model on the table for consideration—one that not only makes the federal government the insurer, but in some cases, the provider as well.

There are very likely other proposals or possibilities than these. But it is encouraging to see a wealth of ideas from Democrats begin to emerge on this issue. It is time for a robust debate that includes as many options as possible.

Nancy LeTourneau

Nancy LeTourneau is a contributing writer for the Washington Monthly.