With Democrats leaning left on healthcare, which proposal will win the party?
Two Democratic senators have proposed different paths this year to achieve the party’s goal of universal healthcare. Senator Bernie Sanders has proposed a single-payer bill, and Senator Tim Kaine has put forth a proposal that would allow individuals to buy into Medicare.
The plans are called “Medicare-for-All” and “Medicare X,” respectively, and they both share the goal of accessible, affordable health coverage for every American. But they accomplish this goal in two very different ways.
To compare Medicare-for-All and Medicare X, we need to first explore the differences between universal healthcare and single-payer.
Universal healthcare and single-payer
While these terms are often used interchangeably, they aren’t the same thing. Universal healthcare is the broadest term, and it doesn’t refer to any particular policy at all. Universal healthcare is any system where every citizen has access to affordable coverage and care.
A “single-payer” system is one way to accomplish universal healthcare. Under this system, there is a single source of payment for medical services, typically the government.
This is different from the existing U.S. system, where there are many payers of healthcare services, including the government, private insurance carriers, and consumers.
Many—but not all—Democrats favor of a single-payer approach. Others advocate for bolstering and improving the Affordable Care Act. The ACA was a step toward universal healthcare, but the law left gaps in both affordability and accessibility. One proposal to fill those gaps is a public option, or a government-operated health plan alternative. This is what Kaine’s plan proposes.
Let’s take each proposal one at a time.
Sanders’ Medicare-for-all plan would create one federally administered, single-payer health system. It would eliminate insurance plans as we know them. Instead, all care would be covered by the government.
Sanders’ plan would cover all types of care, services and equipment, without networks, deductibles, or out-of-pocket costs. It would be paid for by raising taxes—6.2 percent on employers and 2.2 percent on households, and additional taxes on the wealthy.
One benefit of the single-payer approach is that it is much simpler than the private insurance system. Consumers would not have to worry about networks or deductibles, or whether they could afford treatment or insurance.
A single-payer system would likely reduce medical costs, because the government would be able to better negotiate prices than it currently can. However, it would still represent a lot of cost and responsibility to the federal government.
It also faces a long, difficult path to approval. Tax increases are always hard to sell, as is increased government control. Many consumers and politicians alike are not in favor of a government-operated healthcare system.
The plan proposed by Senator Tim Kaine of Virginia and Senator Michael Bennet of Colorado takes a different approach to universal healthcare.
Medicare X would create a public insurance option, or a government-administered health plan to be sold alongside existing private options.
The government plan would work exactly like other insurance plans—it would have premiums, deductibles, and networks. The difference is that instead of being sold by Aetna, it would be sold by the government.
Essentially, this proposal gives consumers under 65 the ability to buy into Medicare. The plans would have the same networks and costs as Medicare plans, though low-income consumers could be eligible for subsidies.
At first, Medicare X would only be available in regions that have limited ACA competition, regions with one or zero plans on the marketplace. It would later expand to all regions and to small employers.
Comparing the two plans
Medicare-for-all more effectively accomplishes the goal of universal healthcare, but at greater cost and with more disruption to the existing system.
Medicare X ensures every consumer has the option to buy individual insurance, likely at a lower cost than the plans currently offered by private carriers. But consumers would still be responsible for premiums and out-of-pocket spending, so affordability would still be an issue for some consumers.
In this way, a public option does not achieve universal healthcare to the same degree as a single-payer approach.
But it represents a less dramatic disruption to the U.S. healthcare system than Sanders’ plan. Allowing consumers to buy into Medicare would be a big change, but it wouldn’t require the dismantling of the existing health insurance industry. Consumers would still have non-government options available if they preferred to purchase private insurance, and plans offered by employers would not be affected.
The question of what would happen to the current health insurance industry is a big one for single-payer proponents. What would happen to BlueCross, Aetna, or Cigna? UnitedHealth Group alone has 230,000 employees. What would happen to these workers if the private health insurance system was dismantled?
Even if we could get the nation to agree that single-payer is the right approach—no small task—practically speaking, it isn’t clear how we would accomplish the transition.
For this reason, Medicare X may have a better shot of becoming the Democratic Party platform than Medicare-for-All.