By Sarah
Kliff and Dylan Scott Dec 13, 2018, 8:40am
EST
Graphics
by Javier Zarracina and Christina Animashaun/Vox; Photos via Getty Images
Sure, Democrats are
lining up behind Medicare-for-all. But what exactly does
that mean?
This year, dozens of
Democratic candidates ran — and won — on a promise to fight to give all Americans access to government-run health care.
A new Medicare-for-all Caucus in the House already has 77 members. All the
likely 2020 Democratic nominees support the idea, too.
“Medicare-for-all” has become a
rallying cry on the left, but the term doesn’t capture the full scope of
options Democrats are considering to insure all (or at least a lot more)
Americans. Case in point: There are half a dozen proposals in Congress that
envision very different health care systems.
“Democrats ran on
health care,” says Hawaii Sen. Brian Schatz. “We now control one chamber of
Congress. We have an opportunity and an obligation to demonstrate what we’d do
if we were in charge of both chambers. We have an obligation to hear from
experts and figure out the best path forward.”
We spent the past
month reading through the congressional plans to expand Medicare (and a few to
expand Medicaid, too) as well as proposals at major think tanks that are
influential in liberal policymaking. We talked to the legislators and
congressional staff who wrote those plans, as well as the policy experts who
have analyzed them.
These plans are the
universe of ideas that Democrats will draw from as they flesh out their vision
for the future of American health care. While the party doesn’t agree on one
plan now, they do have plenty of options to choose from — and many decisions to
make.
The eight plans fall
into two categories. There are three that would eliminate private insurance and
cover all Americans through the government. Then there are five that would
allow all Americans to buy into government insurance (like Medicare or
Medicaid) if they wanted to, or continue to buy private insurance.
The bills we reviewed
are:
We learned these plans
are similar in that they envision more Americans enrolling in public health
plans. They would all give the government a greater role in everything from
setting health prices to deciding what benefits get included in an insurance plan.
Experts say all these bills would almost certainly create an insurance system
that does better to serve Americans with high health care costs.
“If you’re really sick
and have high drug costs, it would be hard not to benefit from these bills,”
says Karen Pollitz, a senior fellow at the Kaiser Family Foundation who
recently co-authored a report comparing the
different Democratic plans to expand public coverage.
But the Democrats’
plans differ significantly in how they handle important decisions, like which
public health program to expand and how aggressively to extend the reach of
government. Some would completely eliminate private health insurance,
eventually moving all Americans to government-run coverage, whereas others
still see a role for companies providing coverage to workers.
Some bills require
significant tax increases to pay for the expansion of benefits — while others
ask those signing up for government insurance to pay the costs.
And while Democrats
aren’t under any illusion that they’ll pass Medicare-for-all this Congress,
they see the next two years as key to figuring out where consensus in the party
lies. More plans are coming too: Jacob Hacker of Yale University, for example,
has outlined the contours of a plan called Medicare Part E, and House
legislation is in the works to flesh out the details.
“We want to have
public hearings on this, we want to see movement on the issue,” says one
Democratic House aide working on this legislation. “The Senate is still
Republican but right now, Democrats have the opportunity to build support, have
public hearings, and help move this idea along and educate members.”
Here are the key
questions those hearings and that education will grapple with.
How many people get
covered?
Bottom line: Some plans from the Democrats would
cover all Americans — while others would provide insurance to more but leave
some number of people uninsured.
In a way, this is the
fundamental question. Even under the Affordable Care Act, 30 million Americans
don’t have health insurance. The left believes health care is a human right,
and mainstream Democrats aren’t far behind them. The whole reason Democrats are
ready to take up health care reform again so soon after the ACA is to fix this
problem.
Medicare-for-all (Senate and House): Every single American
would be covered by a government insurance plan, after a short phase-in period.
Medicare and Medicaid buy-ins (congressional
plans): Millions more Americans would likely be covered, but experts
don’t expect the various buy-in plans to achieve universal coverage. They would
still, after all, be optional programs.
Medicare Extra for All (Center for
American Progress): The health care plan from the leading Democratic
think tank would achieve universal coverage for all legal residents, through a
combination of private and public insurance — at least for the next few
decades. It eventually foresees getting to a very similar level of coverage as
the Medicare-for-all proposals in Congress, by enrolling all newborns into a
government health plan and taking steps that would diminish the role of
employer-sponsored coverage.
Healthy America (Urban Institute’s
Linda Blumberg, John Holahan, and Stephen Zuckerman): This center-left
plan from three Urban Institute fellows is explicitly not a
plan for universal coverage, by attempting to work within certain political
constraints. But it would, according to Urban’s estimates, cut the number of
uninsured by 16 million in its first year.
A big part of the
remaining uninsured would be undocumented immigrants. The plan’s authors said
the program could be adjusted to cover that population but didn’t think there’d
be political will to do so.
What
happens to employer-sponsored insurance?
Bottom line: Democrats are split over whether
expanded Medicare should make space for employer-sponsored plans — or get rid
of them completely.
Nearly half of all
Americans get their insurance at work — and Democrats’ various health care
plans make different decisions about whether that would continue.
Currently, the
American health care system provides employers with a big incentive to provide
coverage: Those benefits are completely tax-free. This means companies’ dollars
stretch further when they buy workers’ health benefits than when they pay
workers’ wages.
This, however, creates
an uneven playing field. Fortune 500 companies get, in effect, a huge federal
subsidy to insure their workers, while an individual who doesn’t get coverage
through their job and makes too much money to receive subsidies under the
Affordable Care Act doesn’t get any advantageous treatment under the tax code.
Medicare-for-all
(Senate and House): Both
the Medicare-for-all plans would make the biggest change and eliminate
employer-sponsored coverage completely. Under these options, all Americans who
currently get insurance at work would transition to one big government health
care plan.
Medicare/Medicaid
buy-ins
The question of
work-based insurance is prickliest for the Medicare buy-in plans. Broadly
speaking, under those bills, more Americans would be allowed to purchase a
public insurance plan under the Medicare umbrella. Everybody who currently buys
insurance on the individual market would be allowed to buy a Medicare plan,
under each of the buy-in bills.
But they differ in
important ways in how much they would let people leave their current job-based
insurance for the new government plan.
The “Choose Medicare” Act (Merkley
and Murphy): Merkley described his bill with Murphy as, potentially, a
glide path to true single-payer Medicare-for-all. Under their Medicare buy-in
framework, workers could leave their company’s insurance for the new public
plan — but only if their employer decides to allow it. Otherwise, they’d be
shut out.
(The bill does include
a provision, however, allowing workers to keep the government plan once they
sign up, even after they leave their current job.)
We asked Merkley why
they left the decision up to the employers, not the employees. He pointed to a
workers’ compensation program that had been successful in Oregon that was
modeled the same way. He’s also worried about adverse selection (employers
sending sick employees to the public plan while healthier workplaces stay in
the private market).
Lastly, he emphasized
the workers who transition to new jobs or go for a period without coverage
would have a chance to sign up for Medicare and then keep that plan even after
they get a new job.
“Workers can go to
their employer and say, ‘I really would prefer to be in the public option,’”
Merkley says. “We wanted to avoid the situation of employers pushing people
out.”
The CHOICE Act (Schakowsky and
Whitehouse): Small employers who are currently eligible to buy
insurance through the ACA’s marketplaces would be allowed to participate in the
Medicare buy-in. Workers at larger firms would be frozen out, however.
Medicare X (Bennet, Kaine and
Higgins): Likewise, small employers eligible for ACA coverage could
buy into Medicare under this legislation, but large employers could not. Medicare
X would actually be limited to customers in Obamacare markets that had only one
insurer or particularly high costs, for the program’s first few years, before
expanding to the rest of the individual market nationwide.
Think tank plans
Medicare Extra for All
(Center for American Progress): This plan does let employers continue to offer coverage to
their workers so long as it meets certain federal standards. At the same time,
it would give employers an alluring, simpler option: stop offering coverage and
instead pay a payroll tax roughly equivalent to what they currently spend on
health coverage.
As to how alluring
that plan would be, that depends a lot on how generous this new Medicare Extra
program is. A generous plan with low premiums would likely lure many away from
their employer-sponsored coverage, whereas a skimpier plan with higher premiums
could convince workers to stick with what they already have. These are policy
details that aren’t currently specified in the CAP plan.
What’s more, Medicare
Extra makes another policy decision that would erode employer-sponsored
coverage: It automatically enrolls all newborns into the public program. That
means a new generation of Americans likely won’t get coverage through their
parents’ workplaces — and would assure the Medicare plan a constantly growing
subscriber base.
Healthy America (Urban
Institute): The Urban
Institute explicitly designed its Healthy America plan with the goal of
disrupting the large employer market as little as possible. They expect only
lower-wage workers whose current insurance isn’t very good anyway to move over
into the brand new insurance marketplaces that would be set up under their
plan.
Those markets would
combine the Medicaid population with the people currently covered by Obamacare but
more or less leave people who get insurance through their jobs alone.
“That’s a real barrier
to doing anything big,” John Holahan at Urban said. “Most people with employer
plans are reasonably happy with them.”
What
public program will expand?
Bottom line: The vast majority of proposals expand
Medicare, the plan that covers Americans over 65. But there is one option that
would expand Medicaid, the plan that covers low-income Americans — and another
option that creates a new government program entirely.
The American
government already finances two major health coverage plans: Medicare and
Medicaid. Taken together, these two programs cover one-third of all Americans: 19 percent
of Americans get their coverage from Medicare, and 14 percent from Medicaid.
What’s more, both of
these programs are popular. One recent poll found that 77 percent of
Americans think Medicare is a “very important” program. Voters have recently
given a boost to Medicaid, too: Voters in Idaho, Nebraska, and Utah all passed
ballot initiatives that will expand the program in their states to thousands of
low-income Americans.
Given the popularity
and size of Medicare and Medicaid, nearly all the Democrats’ proposals use
these programs as a base for universal coverage, changing the rules to make
more people eligible. But there are differences in which programs they pick,
and one plan that starts a new government program entirely.
Medicare-for-all,
Medicare buy-in, Medicare Extra for All: As their names imply, all these plans use
Medicare as the base program for expanding health insurance coverage. Medicare
is, after all, the only major health program run exclusively by the federal
government (Medicaid is run jointly with the states), which can make it an
appealing choice for a national coverage expansion.
Traditionally,
Democrats have focused on Medicare as a base for expanding coverage. And five
of the six legislative proposals we looked at use the program that covers the
elderly as the one that would absorb additional enrollees.
Medicaid buy-in
(Senate and House bills): Recently, Democrats have begun to eye Medicaid as another
option, suggesting that we should focus on expanding the health plan that
covers the poor to Americans with higher incomes.
Sen. Brian Schatz
(D-HI), for example, has offered a bill that would allow every state to let
residents buy into Medicaid. A companion bill is offered by Rep. Ben Ray Lujan
(D-NM) in the House.
This plan wouldn’t
mean moving all Americans into Medicaid — instead, it would
give people the option to sign up for the public program, which would
presumably offer lower premiums because it would pay doctors and hospitals
lower reimbursement rates than private plans typically do.
In an interview with
Vox, Schatz said he likes the idea of this Medicaid buy-in because the program
has proved popular across the political spectrum. In the 2018 midterms, for
example, three red states (Idaho, Nebraska, and Utah) voted to participate in Obamacare’s
Medicaid expansion. “Medicaid is popular in blue, red, and purple states,” he
says. “It’s not politically fraught anymore. So it’s a good place to land for
progressives who want to make progress for everyone.”
Healthy America (Urban
Institute): Rather than rely on
any existing program, Healthy America would create a new one. Obamacare and
Medicaid would effectively be combined into a brand new insurance market
covering upward of 100 million people, and there would be a public insurance
plan under the Healthy America brand.
What
benefits get covered?
Bottom line: Democrats generally agree that health
insurance should cover a wide array of benefits, although there is some
variation around how different plans cover long-term care, dental, vision, and abortion.
Every country with a
national health care system has to decide what type of medical services it will
pay for. Hospital trips and doctor visits are almost certainly included. But
there is wide variation on how health care systems cover things like vision,
dental, and mental health.
Covering more services
mean citizens have more robust access to health care. But that also costs money
— and a more generous health care plan is going to require more tax revenue to
pay for all that health care.
Even Medicare, as it
currently stands, has a relatively limited benefit package. It does not cover
prescription drugs, for example, nor does it pay for eyeglasses or long-term
care.
Instead, many seniors
often take out supplemental policies to pay for those services — or end up
selling off their assets to pay for care in a nursing home.
Medicare-for-all
(Senate and House)
Both single-payer
options envision Medicare covering more benefits than it currently does. The
Sanders bill, for example, would change Medicare to cover vision, dental, and
prescription drugs, as well as long-term care services as nursing homes. It
would also cover a wide breadth of women’s reproductive health services
including abortion, a feature that would likely draw controversy.
The House bill covers
a slightly different set of benefits but, according to one Democratic House
aide, is undergoing revisions to look more similar to the Sanders package. “We
want to make sure we’re able to align the coverage services [of our bill] with
the Sanders plan,” said the aide, who asked to speak anonymously to discuss the
ongoing negotiations.
Medicare/Medicaid
buy-ins
All three notable
Medicare buy-in plans would cover the 10 essential health benefits mandated by
Obamacare: outpatient care, emergency services, hospitalization, maternity and
newborn care, mental health and substance abuse services, and prescription
drugs. None of them include vision or dental care.
The “Choose Medicare”
Act (Merkley and Murphy): This
bill covers essential health benefits, as well as the benefits included in
Medicare’s current inpatient, outpatient, and prescription drug plans. Abortion
and other reproductive services would also be covered.
The CHOICE Act
(Schakowsky and Whitehouse): The ACA’s essential health benefits would be covered.
Medicare X (Bennet,
Kaine and Higgins): Same. The new
public plan would cover the essential health benefits dictated by the 2010
health care reform law.
“The policy would have
all the ACA benefits. We’d give HHS the time and seed money to figure this out
and price it,” Sen. Tim Kaine (D-VA) told Vox previously. “There are studies,
back from 2010, that suggest a public option would not only save money but it would
make the markets more competitive.”
Think tank plans
Medicare Extra for All
(Center for American Progress): The Medicare Extra plan mandates that all health insurance cover
a robust set of benefits including prescription drugs, hospital visits, doctor
trips, maternity services, dental, vision, and hearing services.
Healthy America (Urban
Institute): The benefits package
is again based on Obamacare’s essential health benefits.
How
much does it cost enrollees?
Bottom line: Democrats do not agree on whether patients
should pay premiums or fees when they go to the doctor. Some plans get rid of
all cost sharing, while others (largely those that allow employer-sponsored
coverage to continue) keep those features of the current system intact.
Medicare is currently
similar to private health insurance in that it expects enrollees to pay a
significant share of their medical costs.
The public program,
for example, currently charges seniors a $134 monthly premium (and a higher
premium for wealthier enrollees). Traditional Medicare also has deductibles and
co-insurance. An estimated 80 percent of Medicare enrollees have additional
coverage to help cover those costs.
The plans offered by
Democrats have really different visions for whether enrollees in a newly
expanded Medicare would end up paying these kinds of costs — or if premiums,
deductibles, and copayments would become a thing of the past.
Medicare-for-all
(Senate and House)
Both Medicare-for-all
bills would eliminate cost sharing completely. This means no monthly premiums,
no copayments for going to the doctor, and no deductible to meet before
coverage kicks in.
The only place where
enrollees might pay out of pocket is under the Sanders plan, which does give
the government discretion to allow some charges for prescription drugs — but
even that would be capped at $200 per year.
This is very similar
to how the Canadian health care system works but is actually quite different
from European countries. Most countries across the Atlantic actually do require
patients to pay something for going to the doctor. In France, for example,
patients are expected to pay 30 percent of the cost of their doctor visit —
and in the Netherlands, copayments range from $10 to $30.
In a previous interview with Vox, Sanders
said he considered copayments for his proposal but “the logic comes down on the
way of what the Canadians are doing.”
The senator who rails
regularly against “millionaires and billionaires” doesn’t see value in asking
those people to pay when they show up at the doctor. They’ll pay more in taxes
to finance a system without copayments, but when they go to the doctor, he
argues, they ought to be treated the same as the poor.
Medicare/Medicaid
buy-ins
There is one important
common thread through these bills: Premiums would be set to cover 100 percent
of the actual medical costs that the government plan expects to cover, as well
as any administrative expenses — but nothing more. There would not be any
profits or robust executive compensation, as there still is in the private
market. Premiums could be adjusted by a limited number of factors: a patient’s
age, where they live, the size of their family, and whether they smoke tobacco.
The most notable
difference in the buy-in proposal is in how much patients would be expected to
pay out of pocket.
The “Choose Medicare”
Act (Merkley and Murphy): This
is the most generous Medicare buy-in plan. The new government plan would cover
80 percent of health care costs, matching the “gold” plans on the ACA
marketplaces. The bill would also add new out-of-pocket caps for the
traditional Medicare population, people 65 and older.
The CHOICE Act
(Schakowsky and Whitehouse): This bill would offer several versions of the public plan,
with varying out-of-pocket costs: They would cover between 60 and 80 percent of
expected medical expenses.
Medicare X (Bennet,
Kaine and Higgins): By default, the
government plan would be offered at two tiers: one that covers 70 percent of
medical costs and another that covers 80 percent. The health secretary could
also decide to offer health plans covering 60 percent of costs or 90 percent,
but it is not required.
Medicaid buy-in (Sen.
Schatz and Rep. Lujan):
The Schatz proposal would give the states leeway to decide how they want to set
premiums, copayments, and deductibles. They would cap premiums at 9.5 percent
of a family’s income (a provision that already exists for those covered under
Affordable Care Act plans) or the per-enrollee cost of Medicaid buy-in,
whichever is less.
Think tank plans
Medicare Extra for All
(Center for American Progress): The plan from the center-left think tank would, unlike the
congressional Medicare-for-all options, continue having some Americans pay
premiums tethered to their incomes. This reduces the tax revenue necessary to
finance an expanded Medicare program — but also requires a slightly more
complex system that can calculate each family’s premium and collect that
payment.
Low-income Americans
would be enrolled in Medicare without any premiums. Higher-income Americans
would be expected to pay a monthly premium (at most, 10 percent of their
income) — and pay deductibles and copayments (the exact amount of these is not
set in the CAP plan).
Healthy America (Urban
Institute): Premiums would
range from 0 percent of a household’s income, for people who make less money,
up to 8.5 percent. Nobody would be asked to pay more than that.
The standard health
insurance plan under Healthy America would cover 80 percent of medical costs.
People with lower incomes would receive additional subsidies to reduce their
out-of-pocket obligations, while consumers would also have the option to buy a
plan with higher out-of-pocket costs but lower monthly premiums.
How
is it paid for?
Bottom line: Most Democrats have focused their energy on
figuring out what exactly an expanded Medicare program looks like. Legislators
have given significantly less attention to how to pay for these expansions.
Bringing government
health care to more Americans usually means finding more government revenue to
pay for that expanded coverage. The Affordable Care Act, for example, expanded
coverage to millions of people through a wide range of taxes that hit health
insurers, medical device manufacturers, hospitals, wealthy Americans, and even
tanning salons.
Right now, many of the
details around financing remain murky. One reason for that is we don’t actually
know how much these different plans would cost; the Congressional Budget Office
hasn’t scored any of these plans yet (although there are a few independent estimates of how much the Sanders
plan would cost).
Medicare-for-all
Senate: Sanders’s office has released a list of financing options
that generally impose higher taxes on the wealthiest Americans, such as
increased income and estate taxes, establishing a new wealth tax on the top 0.1
percent, and imposing new fees on large banks.
House: Over on the House side, aides say that while
they are currently working on revisions to HR 676, that focuses mostly on
updating the benefits package — and less on deciding how to pay for the
package. They do not currently expect to release a financing plan in early
2019.
“Let’s get our policy
straight first and then look for suggestions on financing,” says one Democratic
House aide involved in the process. “It’s possible we might offer some ideas on
financing, but that’s still under debate.”
Medicare/Medicaid
buy-ins
Depending on how you
look at it, financing is either one big advantage of the buy-in approach or it
reveals the flaw in their design. These plans still charge people premiums,
which would be calculated to cover the costs of covering people who buy the new
public option plan as well as any administrative costs.
So there isn’t
necessarily a need for a big new revenue source; the premiums are the revenue
source. None of the Medicare buy-in plans included major new taxes or anything
like you would see to pay for the Medicare-for-all single-payer plans. All
three of them do set aside some money for startup costs, but it’s a marginal
amount in the context of the federal budget. And the Medicaid buy-in plan does
bump up certain doctor payment rates, which the legislators say would come from
general revenue.
The differences are so
minor, they aren’t worth going through in detail. But it’s important to
remember the trade-off: Medicare and Medicaid buy-ins don’t require a lot of
new money because people will be asked to pay premiums — but that also means
people will be asked to pay premiums, something the more ambitious versions of
Medicare-for-all try to eliminate.
Think tank plans
Medicare Extra for All
(Center for American Progress): Like the Sanders plan, Medicare Extra for All offers a menu of
possible financing options that target the wealthy. Beyond that, Medicare Extra
for All suggests one unique funding source: taxes on cigarettes and sugary
beverages, as a way to raise revenue and improve public health outcomes.
Healthy America (Urban
Institute): Because Healthy
America combines Obamacare and most of Medicaid, the proposal is largely funded
by repurposing the federal dollars that currently go to those programs. That
would cover the bulk of the costs, but Urban does anticipate the need for new
federal funding.
Like many of its
peers, Urban isn’t yet set on a specific revenue stream, but it has floated a 1
percent increase on the Medicare payroll tax, split evenly between employers
and employees. That would bring in about $820 billion over 10 years, which
Urban thinks would be enough to cover most of the new costs needed to fund
Healthy America.
https://www.vox.com/2018/12/13/18103087/democrats-universal-health-care-sanders-jayapal
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