Posted
to Politics September 17, 2019 by Kate Patrick
Economists
and analysts have discussed how much Democrat health care plans like Medicare
for All — endorsed by 2020 candidates Bernie Sanders and Elizabeth Warren —
would cost the federal government, as opposed to the expansions of Obamacare
touted by Joe Biden and Amy Klobuchar? And which one will cost you more?
Well,
it’s complicated.
At the
third Democratic primary debate in Houston, Texas, Klobuchar slammed Sanders’
Medicare for All plan for eliminating all private health insurance.
“While
Bernie wrote the bill, I read the bill,” she said at the debate. “On page eight
of the bill, it says we will no longer have private health insurance as we know
it. I don’t think that’s a bold idea. It’s a bad idea.”
But
Klobuchar’s — and Biden’s — general plan is to expand the Affordable Care Act,
a system which already isn’t working for millions of Americans. Klobuchar’s plan,
in particular, is light on specifics.
Klobuchar’s
primary goal is to reduce health care costs, which have risen steadily
over the last 50 years and are on track to rise even higher, according to the
Peter G. Peterson Foundation. In 2017, the U.S. spent $3.5 trillion on health
care, which was 18 percent of the GDP. In 1960, health care costs amounted to
only 5 percent of GDP.
According
to GoFundMe, a quarter-million medical fundraisers are set up each year due to
Americans’ inability to pay medical bills.
Two-thirds
of bankruptcies are due to unpaid medical bills, despite increased
coverage under the ACA, according to the American Public Health
Association.
The PPF
attributes the rise in health care costs to an increase in prices. To combat
rising costs, Klobuchar wants to restore the ACA’s phased-out subsidies for
premiums (which means higher taxes) and provide a nonprofit, public health care
option that allows Americans to choose coverage through Medicare and Medicaid.
Given
that 19 Republican states did not expand
Medicaid coverage under the ACA, it’s unlikely they would opt-in to Klobuchar’s
public option program, so the top criticism
with Klobuchar’s plan is that it would just be more of the same, and not create
any meaningful change.
Klobuchar
has not yet announced how much her plan would cost or how she would pay for it.
Biden’s plan, which is
very similar to Klobuchar’s in that it includes an expansion of Medicaid and a
public health care option, would cap premium prices for individuals at 8.5
percent of their income.
His
campaign estimates individuals will save $750/month, and that the plan would
cost $750 billion over a decade. Biden plans to help pay for it by closing
loopholes in the capital gains tax, but his campaign notes that will only
generate about $127 billion, and doesn’t specify how Biden will find the other
$623 billion.
That’s
a smaller price tag than Sanders’ signature Medicare for All plan, which clocks
in at around $30 trillion over ten years, according to several economic analyses.
Under
both Biden’s and Klobuchar’s plans, Americans will see higher taxes on top of
paying monthly premiums and deductibles. The difference with Medicare for All
is that Americans won’t have to pay
premiums or deductibles or copays anymore.
Sanders
says the answer to paying for Medicare for All is that we already are.
“The
largest share of national health expenditures already comes from the
government, amounting to $26 trillion out of the $47 trillion, or 55 percent,
of what our country will spend on health care from 2018 to 2027,” he said in a
document explaining how he plans to pay for Medicare for All. “If the status
quo stays in place, between 2022 and 2031 the federal government will spend
$59.65 trillion. According to estimates from the conservative Mercatus Center,
under the Senate’s Medicare for All legislation, those expenditures will drop
by approximately $2 trillion.”
In an interview with Rolling
Stone, Sanders said that if a family four currently pays $16,000 a
year on premiums, copays and deductibles, they will only pay $9,000 a year in taxes
under Medicare for All, without any premiums, copays and deductibles.
But
some Democrats and conservative thinkers worry that even if Medicare for All
theoretically reduces how much Americans pay for health care, the plan would
devastate the health care ecosystem, leading to skyrocketing prices in the long
run. Concern centers around hospitals in particular.
At the
first Democratic primary debate, Rep. John Delaney (D-Md.) said, “If you go to
every hospital in this country and you ask them one question, which is, ‘How
would it have been for you last year if every one of your bills were paid at
the Medicare rate?’ Every single hospital administrator said they would close.”
In
April, The New York Times ran a story claiming
hospitals would lose “billions” under Medicare for All.
But a
2016 Health Affairs study
and the conservative Foundation for Research on Equal Opportunity (FREOPP) say
hospital consolidation is one of the primary reasons for rising health care
costs.
“On
average, procedures cost 44 percent more in hospital markets with an
above-average degree of consolidation,” FREOPP founder Avik Roy said in blog post on
the topic. Roy served as a health care policy advisor for Mitt Romney’s 2012
campaign and an advisor for Rick Perry’s 2016 campaign and Marco Rubio’s 2016
campaign.
This
leads to exploitive pricing and other anti-competitive practices, including
forcing insurers to sign contracts that barred them from recommending patients
to less expensive hospitals.
Roy advocates for
a mixed private/public health care system in his work, and said “capping
reimbursement rates for private and individual payors at Medicare rates in
extremely concentrated hospital markets” would help stop and prevent hospitals’
anti-competitive practices.
Roy
thinks Medicare’s discount program, Medicare Advantage, should be used as the
template for health care in America.
Medicare
Advantage provides health care to seniors via private insurers, provides lower
costs to seniors and is less debt-ridden than the traditional Medicare program.
Traditional
Medicare also disproportionately benefits wealthy seniors, Roy said, because
American taxpayers pay for subsidies for their health coverage. Besides being
hardly “fair” that low-income Americans pay for the health care of the
“ultra-rich,” Roy said it’s also fiscally irresponsible.
Eliminating
those subsidies for individuals with lifetime earnings of over $10 million
would knock more than $50 billion off Medicare spending over a decade.
‘The
best way to reform Medicare — and to provide affordable health care to every
American — is to go in the opposite direction: to enact reforms that will
further improve the quality and affordability of Medicare Advantage plans, and
to learn from Medicare Advantage to improve the coverage that younger Americans
can obtain,” Roy said.
An ABC
News/Washington Post poll found
that 40 percent of Americans are most likely to “oppose” Trump in 2020 based on
how he has handled health care, and “voters in the 2018 midterms selected
health care as the top issue in their vote by a wide margin over three others
offered – and those who picked it favored Democrats for Congress by 75-23
percent.”
In
July, Sanders pushed back on plans like Roy’s, Biden’s and Klobuchar’s, arguing
that health care is a human right, and as long as corporations are major
players and decision-makers in health care, they will engage in unfair and
anticompetitive practices and prices will continue to rise.
“I will not be deterred from ending the corporate greed that
creates dysfunction in our health care system,” he said on Twitter.
“We must pass Medicare for All.”
Kate
Patrick reports technology and finance news for InsideSources. She previously
reported supply chain, freight, logistics, and procurement news as well as
supply chain tech and regulation news for B2B startup Industry Dive.
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