Many are clamoring for Medicare for All, so the Democratic presidential candidates have jumped on the bandwagon— or so it seems. Our panelists look beyond the headlines and analyze what is really being said, and what changes will come if a Democrat prevails in 2020.
Everybody appears to be talking about Medicare for All. Many US citizens are clamoring for it and the democratic presidential candidates are referring to it as they campaign. Congress is bickering and the Congressional Budget Office (CBO) has begun to weigh in.
First Report Managed Care’s experts took a look behind the headlines, analyzing what each of these bodies is really saying. What is the public asking for? What do the presidential candidates and Congress want to give them? And what does the CBO early analysis reveal? Combing through the clutter, our experts measure whether Medicare for All has legs to stand on and, if not, what will get traction?
WHAT THE PUBLIC IS SAYING
Medicare for All would be great, if….
Does the public want Medicare for All? It depends on how you ask. A recent CB Insights poll comprising 625 adults, showed that when told that Medicare for All would guarantee health insurance for all Americans, 7 of 10 surveyed, supported it. Sen Bernie Sanders (I-VT) begins many of his speeches speaking about about Medicare for All with the promise of guaranteed health care. However, he does not mention the following effects:
Americans will not be able to keep their current employer-based plan. Only 37% approve of a plan that eliminates private insurance.
Taxes are likely to increase. Only 37% approve of a plan that results in paying more taxes.
The current Medicare program might be impacted. Only 32% favor Medicare for All when told that it might threaten Medicare.
There might be delayed care. Barely one-fourth favor single payer when told it might cause delays in getting some tests and treatments.
The January 2019 Kaiser Health Tracking Poll showed similar public sentiment.
Arthur F Shinn, PharmD, president, Managed Pharmacy Consultants in Lake Worth, FL, weighed in, “If you asked me if I would like to use a private jet to go anywhere it was able to fly, with no strings attached, I’d jump at the chance.” However, he said his answer would be different if he was told that it was going to cost him, and cut off his access to commercial flights.
“Most Americans want coverage for all, but it is lost on them that the added costs will be borne by the taxpayers,” said Larry Hsu, MD, medical director, Hawaii Medical Service Association in Honolulu, HI.
Randy Vogenberg, PhD, RPh, principal, Institute for Integrated Healthcare in Greenville, SC, added, “In a highly-charged political climate, there remains considerable gaps in knowledge and precious little
information that is helping to educate the public about [Medicare for All].”
“The public has a poor understanding of the issue,” agreed Gary Owens, MD, president of Gary Owens Associates in Ocean View, DE. “Sure, they want health care coverage, but they really don’t want to pay for it and don’t want to see delays or changes in the current system.”
Norm Smith, a principle payer market research consultant in Philadelphia, PA, said that while he sees a yawning gap between public perception and reality, he doesn’t blame the public. “No one is clearly defining what Medicare for All is. It’s a major mistake to [put forth] an undefined benefit package. You shouldn’t sell the [public] on something so nebulous.”
Melissa Andel, vice president of health policy, Applied Policy in Washington, DC, said she finds this lack of clarity infuriating. “Do those promising the public that Medicare for All will eliminate deductibles, cost-sharing, and premiums even understand how Medicare works? Because Medicare has deductibles, cost-sharing, and premiums. So, are they really proposing an entirely new benefit that is even more generous than the current Medicare benefit? That’s an entirely different conversation. The American public deserves to understand what is exactly meant by ‘Medicare for All’ and ‘no out-of-pocket costs.’”
EXPECTATIONS VS REALITY
In a perspective published in the New England Journal of Medicine, “The upcoming U.S. health care cost debate: The public’s views,” it was noted that the vast majority of the public favors programs that prevent disease, limit what can be charged, allow younger individuals to buy into Medicare, and/or extend Medicare to all individuals. At the same time, they do not want programs that restrict access to treatments and medications based on expert review of the treatment’s or drugs benefit.
“We want whatever we want, when we want it, and we want someone else to pay for it,” said Ms Andel, echoing the public sentiment. Dr Vogenberg said such wishes “show little connection to reality.” Like Mr Smith, he does not blame the public. He called for “timely, transparent, and meaningful [distribution of] information to mobilize public opinion.”
Ms Andel said she wonders how things would be unfolding today if Democrats were more forthcoming as they were promoting the Affordable Care Act (ACA). “They missed a huge opportunity to level with the American public. I often wonder what would have happened if President Obama told us that the things that we wanted—essential health benefits, guaranteed issue, community rating, out-of-pocket caps—would require higher premiums and limited provider networks. I think the backlash to the ACA was driven largely by the fact that people felt like they were lied to. They were told that nothing would change [for people who were happy with their plans], everything would be better [for those who were not happy], and premiums would be lower. But none of that was the case.”
And the lack of candor continues today, explained Ms Andel. “No one seems to be acknowledging the trade-offs necessary to get the system that they say that they want. They point to other countries with a national system, but don’t note some of the limitations in place in those countries. They only tout the good, without admitting that, well, you might have to wait longer for elective surgeries, or share a hospital room, or try older drugs and fail before you have access to a newer drug. “Maybe Americans would be okay with those trade-offs. At the very least they deserve to be told honestly [about them].”
Dr Hsu agreed, noting that the US public is being conditioned to equate the right to health insurance to unencumbered access. “They want no restrictions, and no second-guessing what their physician ordered for them. But this does not address cost.”
WHAT THE CANDIDATES ARE SAYING
Little support for true single payer
Are the democratic presidential candidates really all-in when it comes to Medicare for All? Most appear to be, but when you examine their stances closer, far fewer support migrating quickly and exclusively to true single payer. At press time, there were 23 democrats vying to their party’s nomination. According to The Washington Post, 19 of them were either guaranteed or likely to qualify for the first debate in late June. Of these, only two candidates (Sen Sanders and Rep Tulsi Gabbard (D-HI)) support full adoption for single-payer Medicare for All, meaning no private insurance, fully funded (no cost sharing), and dental and vision coverage.
More are pushing for Medicare for anyone who wants it
The rest are expressing a preference for something different, and most advocate improving the ACA and/or including a public option in the mix. In other words, Medicare for Anyone Who Wants It, which does not roll off the tongue as nicely as Medicare for All, but it is what most candidates support.
“I think it shows how unrealistic [Medicare for All] is, and, by extension, how foolhardy it is to use true single payer as a litmus test for democratic candidates in general,” said Ms Andel. Dr Vogenberg called single payer “too ideological and not practical for mainstream voters.”
Dr Owens was frank. “Sanders and Gabbard seem to be lost in self- delusion.” Mr Smith questioned their due diligence capabilities noted that “Bernie and Tulsi have not run the numbers” and Sanders’ political stance, “Bernie is a true socialist.”
Which leaves us with “Medicare for Anyone Who Wants it,”—also known as the public option. We recall that President Obama pushed for the public option to be included in the ACA. If a Democrat wins the White House in 2020, our experts think that Obama may see that plan come to fruition.
“The public option will likely be the least disruptive of all the current plans,” explained Ms Andel. Even if Sanders wins, his plan doesn’t actually exist, so it is a really heavy lift. It would require overhauling health coverage for just about every American, and would also involve a large increase in taxes. I just don’t see how anyone who is serious can think that will actually happen without major compromises.”
Dr Owens agreed, “I think the best the Democrats can hope for is to open up Medicare for those who wish to take it and pay the premiums.” He doesn’t think universal coverage is an impossibility, but 2020 will be too soon. “There will need to be incremental steps toward single payer and that could take a decade or more.” Polarization will remain. “I see a scenario where one party moves in a direction and the other works to tear it down.”
That is why moderate Democrats such as former Vice President Joe Biden and Sen Amy Klobuchar (D-MN), are advocating for smaller steps, which they hope will lead to getting something done. Mr Smith calls it “modified Obamacare,” and thinks it is a viable first step. Dr Vogenberg said that whatever you call it, it’s not going to be single payer and that out-of-pocket cost burdens will drive the public away from that notion.
Few are talking about Medicaid expansion and Ms Andel explained that is because “Medicaid expansion only solves the problem of coverage, which the ACA is addressing.” The bigger problem is high out-of-pocket costs, and expanding Medicaid doesn’t address that.” Besides, added Dr Vogenberg, states are becoming tapped out and unable to afford expanding Medicaid. He added that the problem is not helped by illegal immigration and fewer federal support dollars.
Four of the candidates are waffling and, thus, sending mixed messages, among them Sen Kamala Harris (D-CA) and Sen Elizabeth Warren (D-MA). In January, Sen Harris firmly supported elimination of private insurance but has since changed her tune, saying during a town hall, “That’s a conversation we need to have.” Mr Smith commented, “Kamala must have had a talk with a serious person, and backed away,”
Meanwhile, Sen Warren supports Medicare for All, but acknowledges that there is more than one way to skin a cat, and is not clear on her commitment to eliminate private insurance, calling for a discussion on the matter.
“I think it is telling that Warren, who has released the most detailed policy proposals for other issues so far, is still struggling with health care,” offered Ms Andel. Mr Smith noted that those who are flip-flopping are doing so because they “don’t have the firepower to talk much about changing our health care system.”
WHAT THE CBO IS SAYING
It’s complicated, and no one knows what Medicare for All will cost
The position of CBO—based on a recently-released report to Congress that was backed up by testimony on Capitol Hill—can be boiled down to these three points:
- Single payer could work well, but it depends on the model chosen;
- It is complicated, and there will need to be trade-offs; and
- No one—not even the CBO—knows yet for sure what single payer would cost and what it would save.
If the CBO can’t tell us, who can? This shines a light on “the reality of what is truly required to make something like this happen,” explained Dr Vogenberg. He added that while other countries’ health systems are being pointed to as examples of single payer success, “Keep in mind that nothing like this has been done anywhere else in the world on this scale.” The US comprises nearly 330 million covered lives.
“Explaining the impact of Medicare for All is like trying to explain [the impact of ] the benefits package of Obamacare,” offered Mr Smith. Dr Shinn likened it to the recent US Department of Health & Human Services rule proposal regarding pharmacy benefit manager rebates shifting to the consumer at the point of sale. “No one really knows the financial impact of that move, and the same thing applies here.” He added that questions remain about who will administer a government-back program. There are so many unknowns. We have problems administering current Medicare, so how is [Medicare for All] going to work?”
The CBO stands ready to weigh in with an economic analysis, but is waiting to see which single-payer plan emerges as the winner. At that point, “once people start having to deal with hard numbers, reality will hit, and hit fast. It will be a lot more difficult to dismiss critics [of Medicare for All] with a pithy tweet,” noted Ms Andel.
WHAT CONGRESS IS SAYING
A deep divide on Capitol Hill
During House Budget Committee hearing May 22 on single-payer health, it was no surprise that the partisan divide was wide. Most Democrats spoke glowingly or hopefully about the day the country migrates to universal care. Most GOP senators scoffed, alluding to hidden costs and government inefficiency.
Rep Bill Johnson (R-OH) said that the government has been trying to make Veterans Administration and Department of Defense electronic medical record systems interoperable since 2011, at an estimated cost of $16 billion. He said he wondered how much it would cost to merge the records of 329 million Americans. Meanwhile, Bill Flores (R-TX) pointed out that the VA—with ~9 million veteran Americans currently employs 378,000—a ~24:1 ratio. “That implies a federal bureaucracy of about 14 million employees” for Medicare for All, given that would be nearly 330 million covered lives.
Are these reasonable questions? Both Drs Shinn and Owens said they think so, with Dr Owens adding that the observations add to the evidence that expected costs are way underestimated. Ms Andel agreed, but only to a point. She said that Rep Johnson appeared to be implying that this would be a new problem that emerges under a single-payer system. But she noted it would exist independent of the type of system the nation operates under. Ms Andel added that while the VA system employs providers, that would likely not be the case under Medicare for All, where they would remain independent.
She also questioned the wisdom of downplaying an attempt to integrate health records. Interoperability is “not a bad selling point. I am guessing that if you polled Americans, they would actually like the idea.”
Amid the hearing’s political rancor, one interesting question emerged. Given Medicare for All’s complexities, combined with the fact that once adopted there is no turning back, does it make sense to test the concept? Under questioning by Rep Steve Womack (R-AR), Jessica Banthin, PhD, a deputy assistant director with the CBO, noted that it is possible for a state or group of states to migrate to a single-payer system.
Our panel’s reaction was tepid. Dr Owens suggested it would “help us learn most of the hidden issues in the transition.” Plus, he added, it is a reasonable way past partisan agendas. Dr Vogenberg echoed the sentiment. “Congress won’t do much, so that leaves it to the states to initiate something and/or figure out a path forward.”
Mr Smith said he believes California is the only state where it can be practically tested and yield results that can be extrapolated nationally. However, “It must be actuarially correct—not just another unfunded government benefit. It must also allow for complementary private for-profit insurance coverage. It should look like [the system in] Switzerland, with less governmental support.” Which brings us back to square one, since that is not true Medicare for All. Besides, concluded Mr Smith, “if we don’t have the country go all at once, it will create medical care migration.”
Changing their tune back home
Members of Congress up for re-election in 2020— particularly Democrats who represent traditionally Republican districts—might have to change their tune once the campaign season swings into full gear. Ms Andel said she sees the need for a shift toward the center. “The liberal wing of the Democratic party is pressuring leadership to go hard left on health care. The newer, more liberal members don’t seem to appreciate that they are enjoying a majority because those moderate members are in Congress. If you take them out, those seats will flip back to the Republicans, Democrats definitely won’t get what they want. It is great to have principles, but their current strategy seems like it will ultimately be self-defeating.”
Dr Owens added, “Democrats will need to stay away from Medicare for All in traditionally Republican districts. Increasing taxes and [touting] a federal health care system is a nonstarter.”
THE BOTTOM LINE
We cannot expect Medicare for All to become the law of the land anytime soon, for a number of reasons. For starters, the current Medicare program cannot function without private insurance, noted Ms Andel, pointing out that 40% of Medicare beneficiaries are on privately insured Medicare Advantage plans. Thus, eliminating private insurance would be disruptive to virtually the entire US population that is currently covered.
As for those who are not covered (as well as those who cannot afford to use coverage), it appears that Sen Sanders, Rep Gabbard and others who are all in on single payer are nobly taking up their cause. “Medicare is a wonderful middle-class benefit. It is not targeted to citizens with lower incomes,” explained Mr Smith. “But the way Bernie and others are presenting it, it would be aimed [to address the needs of ] lower income groups.”
How committed Sen Sanders and Rep Gabbard remain to this cause will become clear as the debates take place and polls tell them what the public thinks. The reality is a shift toward the center, even for these hard-liners. And should one of them win the nomination and ultimately topple President Trump, hard left policies will likely go nowhere.
“The country is not ready for this much sweeping change,” said Dr Owens, adding that the ACA’s journey can serve as a blueprint. Dr Vogenberg agreed, noting that even under a scenario where Democrats control both chambers of Congress and the presidency, “the economics remain a high hurdle.” Mr Smith said a Democratic sweep might put Medicare for All on a faster track, but once costs were publicized, “taxpaying Americans with commercial health insurance would revolt.”
Ms Andel sees the United States eventually transitioning to a “more overt government-sponsored health care program. In fact, I think it is likely, but perhaps not as quickly as some may wish.”
Ms Andel brings it back to the need to be candid with the public. “I have yet to see proponents of a true single-payer system acknowledge [the challenges of implementation] and honestly answer how they plan to deal with that. It makes me question the seriousness of their policies in the first place. Until single-payer supporters are willing to honestly, and in good faith, address these fundamental truths, then we are doing ourselves a disservice by giving them attention because it’s really just fantasy otherwise.”