The debate about Medicare for All is about to get more serious ― and more complicated.
The idea of creating a single national health insurance program for all Americans has been a big topic of political conversation since 2016, when Sen. Bernie Sanders (I-Vt.) touted it during his Democratic presidential campaign. But Medicare for All couldn’t be anything more than a rallying cry as long as Republicans controlled the levers of power in Washington.
Political circumstances are different now. Democrats hold the House majority and, as Speaker Nancy Pelosi’s office confirmed to The Washington Post on Thursday, at least two committees will hold hearings on Medicare for All this year. Exactly what those hearings will entail isn’t clear ― Democratic leaders aren’t saying ― but one focus will be a bill that Rep. Pramila Jayapal (D-Wash.) plans to introduce in the next few weeks.
Jayapal is a leader of a Medicare for All House caucus that had 78 members as of late November and, with an infusion of newly elected Democrats, should soon have more. The new bill will be similar to one she co-sponsored in the last Congress, which in turn was similar to a bill Sanders introduced in the Senate.
Jayapal has said she hopes a version will get a floor vote, although that seems a long ways off. The committees taking up the proposal initially aren’t actually the ones that would write a health care bill. Even so, the hearings could represent the most serious attention the concept has received on Capitol Hill since the late 1940s, when committees took up then-President Harry Truman’s similarly designed, but ill-fated national health insurance proposal.
And Democrats in Congress won’t be the only ones talking about Medicare for All over the next two years.
When Sanders introduced his bill last year, the list of 16 Democratic co-sponsors included several prospective presidential contenders ― among them, Sen. Elizabeth Warren of Massachusetts, who last week launched her exploratory committee for a White House bid. That announcement came one day after Sen. Kamala Harris of California, another likely presidential candidate, reaffirmed her support for Medicare for All in a New York Times Op-Ed. And, of course, Sanders himself is widely expected to run again.
One reason Medicare for All will get a hard look is that the Democratic Party’s increasingly powerful progressives are determined to improve upon the coverage gains made under Affordable Care Act, which has helped many millions get health care but also left many millions still struggling to pay medical bills. A single government insurance plan, progressives say, would be more efficient and effective than Obamacare’s awkward mix of private and public plans.
As proof Medicare for All can work, they cite the performance of national health systems in countries such as Canada, Sweden and Taiwan. As proof Medicare for All is popular, they cite surveys showing support among U.S. adults reaching 59 percent. But those poll numbers can be misleading. The same surveys show that when people hear about potential costs and trade-offs that come with Medicare for All, support falls.
Even the architects of Medicare for All plans haven’t fully worked out how their systems would function. That’s particularly true when it comes to money questions, like how to pay doctors and hospitals or how to finance all the new public spending it would require.
They don’t need all the specifics now. Medicare for All isn’t going to become law as long as Republicans control the Senate and Donald Trump is the president. Meanwhile, the lawmakers and staff working on plans have already done more thinking than their conservative counterparts did about mythical, ultimately ill-fated Obamacare replacements.
But a Medicare for All system, like any complex policy enterprise, would entail difficult trade-offs. At some point advocates need to figure out how they want to handle those, how they’ll overcome the inevitable political resistance to what they decide and which parts of their vision matter to them most.
Among the issues to consider:
Should Private Insurance Have Any Role At All?
The existing Medicare for All proposals would basically eliminate private insurance because the new public program would cover everything, every single American would belong to it and the law would prohibit private insurers from offering anything similar.
The political benefit of this simplicity is that it’s easy to explain. The main policy benefit is that it would simplify billing, which means that hospitals, clinics and other providers wouldn’t have to hire so many administrative staff. That would make health care less expensive.
But wiping out private insurance would also mean ending the insurance arrangements that the majority of Americans now have, either through their employers or through Medicare Advantage, which is the private insurance option for seniors on Medicare.
How Americans would feel about this is a big unknown. As employer insurance gets more expensive, employers are passing along some of those higher costs to their workers in the form of higher co-pays and deductibles, to the point where some of the employees struggle to pay bills. And employer coverage often requires dealing with limited networks of doctors and hospitals.
But employer coverage is still popular, at least according to industry polling. As the 2017 fight to repeal Obamacare and pretty much every other health care battle has shown, change of any sort is scary. Americans are unlikely to welcome it unless they are absolutely convinced it’s a change for the better.
How Generous Should Coverage Be?
No more copays, no more coinsurance, no more deductibles ― yes, that’s right, out-of-pocket spending would basically disappear under the existing Medicare for All proposals. The only exception would be a provision in the Sanders bill that would allow some token cost-sharing to encourage use of generic drugs.
The logic here is that co-pays and deductibles inevitably fall hardest on the sick, because they have higher medical bills, and the poor, because they have less money at their disposal. Research shows that these groups will frequently respond to high out-of-pocket costs by rationing their own treatments and, as a result, suffer.
But zero cost-sharing could also encourage people to get care they don’t need, which could mean unnecessary (and potentially harmful) tests and treatments, all while driving up costs throughout the system. Purely from a budgetary standpoint, the federal government would have to spend a lot more money if it’s assuming responsibility for every single dollar on every single medical bill for every single American.
Zero cost-sharing is relatively unusual internationally. Most systems require at least some out-of-pocket spending, although it’s usually a lot smaller and waived entirely for the poor and for treatment of cancer, diabetes and other chronic conditions.
How Aggressively Should Government Control Prices?
The reason Medicare for All can provide coverage to everybody, while spending less money, is that the government would regulate prices throughout the health care sector ― not just on prescription drugs, but for doctors and hospitals and everything else.
Studies have shown that health care prices in the U.S. are outrageously high by international standards. Knee replacements cost $28,000 on average in the U.S., for example, while they cost $18,000 in the U.K. In a Medicare for All system, the government would force American prices down ― not all the way down to European levels, but enough to get a better handle on costs here.
The big question is how doctors, hospitals, drugmakers and all the other industries related to health care would react. Some would figure out how to become more efficient or live with lower margins. Some would react simply by reducing capacity, right at a moment when millions of newly insured people were seeking it.
And that’s assuming the price cuts would even become law. Even modest proposals to reduce what government programs pay providers and suppliers of medical care generate huge opposition from their lobbying groups. The kind that would come with Medicare for All would likely provoke an all-out war, one for which industry groups are already preparing.
A lot would obviously depend on the details ― that is, precisely how low a Medicare for All proposal would push prices and, critically, how long it would take for those reductions to take place. There’s a vast difference between cutting hospital rates by 10 percent over three to four years and cutting them by the same margin over seven or eight.
How Should Government Finance The Program?
Medicare for All envisions the federal government spending a lot more money on health care than it does today. The government has to find that money ― by raising revenue through taxes or government-imposed premiums, cutting other spending, accepting higher deficits or some combination of the three.
The taxes and premiums would be in lieu of what private individuals and employers pay for insurance today, so that, advocates say, a majority would come out ahead. But exactly how many would depend on the budget arithmetic in the rest of the program. If the cuts in payments to doctors and hospitals aren’t deep enough, for example, the whole program would end up more expensive, requiring bigger taxes and swelling the ranks of people who would feel worse off financially.
How Much Can Be Done, And How Quickly?
Many Democrats do not support Medicare for All. But at this point even Democrats unwilling to endorse it are frequently calling to expand public insurance programs in some fashion ― if not by creating a new government plan that enrolls everybody, then by opening one of the two big existing programs, Medicare or Medicaid, to more people.
Others are enthusiastic about Medicare for All, but think it would be more practical, as policy and politics, to have a more gradual transition ― for example, by making the new public insurance plan voluntary for individuals and employers, while enrolling newborns so that it gets bigger over time. That’s the approach of a new bill from Reps. Rosa DeLauro (D-Conn.) and Jan Schakowsky (D-Ill.).
Such a scheme could also preserve a role for private insurers, providing the same kind of alternative, tightly regulated coverage they do for seniors on Medicare today. Hybrid systems with both public and private insurance are actually pretty common around the world ― and succeed in establishing health care as a right, just as single government programs do.
The most committed Medicare for All advocates believe their approach is better than any of these ― or, at least, a better starting point for debate and negotiation. Over the next two years, they’ll get a chance to make their case.