When the five leading Democratic candidates for president, Joe Biden, Pete Buttigieg, Kamala Harris, Bernie Sanders, and Elizabeth Warren, speak about their health proposals at rallies, debates, and during interviews, they typically direct their message to patients. But when listening carefully, their message is often directed at three primary stakeholders: payers, providers (clinicians and hospitals/clinics), and patients.
With the help of our experts, First Report Managed Care decided to examine each candidate’s campaign rhetoric and talking points. We also asked our panel of experts to analyze each position. For the purpose of this discussion, we grouped Sanders and Warren together, since Warren has not yet put forth an official plan but has stated support for the Sanders Medicare-for-All bill.
Our panelists include:
- Melissa Andel, vice president of health policy, Applied Policy, Washington, DC;
- Larry Hsu, MD, medical director, Hawaii Medical Service Association, Honolulu, HI;
- Gary Owens, MD, president of Gary Owens Associates, Ocean View, DE;
- Norm Smith, principle payer market research consultant, Philadelphia, A; and
- Daniel Sontupe, executive vice president and director market access & payer marketing, The Bloc Value Builders, New York, NY.
Sanders and Warren are saying this to…
Payers: The federal government is taking over as the sole payer for virtually all health services in the US. You will still have a role in health care, but it will be very limited to supplemental coverage.
Providers: We will eliminate administrative overhead and allow you to focus on practicing your craft, which will lead to lower spending and improved outcomes.
Patients: You will pay more in taxes, but many of you will see a net savings in your overall spending. Some—particularly those who are in the upper middle class and higher—will likely experience increased costs because your tax will outweigh your decreased health costs. This shift is fair and allows for long-neglected populations to start receiving better care at a lower cost. Additionally, unlike Medicare, Medicare-for-All will: (1) cover vision and dental care; (2) cover prescription drugs after a small copay; and (3) provide home- and community-based long-term care services.
Do you agree that Medicare-for-All will accomplish these things?
Ms Andel: I am skeptical of all of the claims that transitioning to Medicare-for-All would drastically reduce administrative overhead. I can’t imagine any modern health care system with minimal administrative overhead requirements. Billing and claims processing would still be required, and I presume electronic health records would still be encouraged. That requires administrative overhead.
The current Medicare program requires thousands and thousands of pages of regulations each year just to keep going. Moreover, a health care system where everything is covered, without question, and with no restrictions is simply not realistic from a safety or program integrity standpoint.
Mr Smith: It’s a pipe dream. Just look at the challenges faced by the ACA [Affordable Care Act] rollout. This would more daunting. And you’d need an overall tax increase that is higher than the GDP [gross domestic product] to pull it off. It’s not realistic.
Dr Hsu: Medicare-for-All sounds good, but the issue of affordability is not well addressed. Medicare that exists today is not designed well to manage costs, promote quality, and improve clinical outcomes. For example, it does not negotiate drug prices. [Editor’s note: The Sanders bill would allow such negotiation.]
Mr Sontupe: The principles behind Medicare-for-All are wonderful. See any doctor, no one is denied coverage, no copays, no co-insurance. My concern is that politicians will never cross the aisle to enact a plan like this. It is Pollyanna to think they will.
Dr Owens: It is cost-prohibitive and the country is simply not ready for it.
Ms Andel: I am also curious about the need for supplemental coverage in the world that Sanders is promising. If there are no deductibles, copays, premiums, or coverage restrictions, why would there be a need for supplemental coverage? [Editor’s note: Some candidates appear to be responding to polls showing that many prefer their private plans with claims that private insurance will not completely go away and be available to cover elective procedures. But in reality, such insurance does not exist.]
What are Sanders and Warren not saying about Medicare-for-All?
Ms Andel: You don’t hear Sanders or Warren talking about the need for an entity to establish payment rates and coverage parameters, as well as to manage fraud, waste, and abuse. Sure, there would be less burden if there was only a single entity making coverage and payment decisions, but it wouldn’t be eliminated entirely.
Mr Smith: I’ve heard it said that the Sanders bill is really Medicaid-for-All because its costs and benefit design are much more reflective of that program. I am curious about the long-term care coverage. Would beneficiaries need to “spend down” their wealth? Currently, most states require that before paying for such care.
Ms Andel: The program that Sanders describes does not resemble Medicare in its current form. So, we are talking about eliminating the system that covers the majority of Americans—private coverage—and completely overhauling the program that you want to move them to. That is quite a large task but I see very little acknowledgement of just what a big lift this will be.
Dr Owens: The cost estimates and projections are not well defined. Also, you don’t hear the candidates addressing the fact that a significant number of Americans want to retain their current plans. They are not addressing the potential disruption that would cause.
Mr Sontupe: Exactly. They are not talking much about the economic impact to the country if insurance companies no longer manage this business. How many people would lose their jobs? How would people afford the tax implications associated with this type of policy? How do you smoothly roll it out? Why would we need Medicaid? What are the reimbursement implications for providers?
Ms Andel: I don’t hear Sanders or Warren talking about what we would do between now and when Medicare-for-All takes effect. How do they plan to address very real current needs in the interim?
Does the overarching message of Sanders and Warren—that we need a bold plan a-la-FDR/Lyndon Johnson—resonate?
Mr Sontupe: I’m not sold on the fact that Medicare-for-All is a bold plan. It is government overreach, when in actuality we need less government and more collaboration on the private side. Think about it. Why is it wrong for a pharmaceutical company to work with a payer to help drive medication adherence? So what if the payer/PBM [pharmacy benefits manager] and the pharma company make more money, as long as the goal of improved outcomes is achieved? Medicare Part D is not designed this way—it solely manages cost. The misaligned objectives we see today is, in my opinion, the government’s fault.
Ms Andel: I think Americans want change, but they are nervous to give up what they currently have. That being said, I have been somewhat surprised to see that public opinion on the topic in general appears to be shifting slightly left. Still, polls indicate that even as people say they support Medicare-for-All/single-payer, they also think that nothing for them personally would change under such a system. It looks like there is still a lot of cognitive dissonance at play.
Dr Owens: Essentially, Americans want it all—access to more and better health care without paying more. This is borne out in surveys where Americans support Medicare-for-All in concept, but support is weaker when to prospect of significant tax increases is introduced.
Mr Smith: Is Medicare-for-All really a bold plan? Crisis mentality is formed when it’s your crisis. The reality is that most Americans are satisfied with their present health care—not the insurance, but the care provided. Until that changes, there is no need for a radical change in the system.
Ms Andel: By the way, I think the fact that Warren has not yet released a detailed health plan is telling. She’s put out the most in-depth policy positions on just about every issue, yet, is struggling with a health care plan. It shows you just how difficult it is to square the promises being made regarding Medicare-for-All with reality.
Biden is saying this to…
Payers: The public option, the provision that was successfully kept out of the ACA, is being implemented. You will maintain your role in the system, but will now have to compete for business, since the public option will be available for employers and individual patients to buy into. Moreover, the government will use its bargaining power to achieve more favorable rates for its customers/patients.
Providers: Keep practicing as you have under the ACA, but with the understanding that you will be treating more patients covered by the government. Additionally, be forewarned that you will no longer be able to bill as an out-of-network provider if your facility is in network.
Patients: The assurance of a more affordable plan will be there for you—and will reach you sooner and with less disruption than full-blown Medicare-for-All. You decide what kind of coverage you want. You will also receive:
- Tax credits if you are at a certain income level or a part of a middle-class family;
- Expanded Medicaid coverage if you live in a state that did not expand under the ACA (in the form of free access to the federal public option); and
- More affordable medications because the government will be allowed to negotiate drug prices with pharmaceutical companies.
Do you agree that the Biden plan accomplishes these things?
Mr Sontupe: To Biden’s credit, he is proposing to go where he and President Obama wanted to go in the first place. I think if the stakeholders are aligned, this could be successful. It keeps the business of health care and insurers moving and keeps more people employed in these areas.
Dr Owens: For the most part, this is Obamacare part two. It is reasonable inasmuch as it will potentially expand coverage options to more Americans and it keeps the current private system intact.
Mr Smith: Tax credits and expanded Medicaid coverage are doable. But I get a little nervous about promising free access to the public option in states where Medicaid has not been expanded. You are likely going to have to limit access to those people.
Dr Hsu: The funding via tax credits, expanded Medicaid, and free public options are not new, not innovative and do not address the long-term financial burden.
What is Biden not saying about his plan?
Mr Smith: There is an expectation that having the federal government negotiate with pharma will get lower prices. I don’t think that’s viable, because payers have already gotten net pricing lower. If you only look at list prices, sure, you can show a savings. But what company is going to start negotiating with CMS [Centers for Medicare & Medicaid Services] with their list price? None. Also, restricting Medicare benefits would require changes to the basic Medicare law, which demands unlimited access.
Mr Sontupe: What happens if you choose to be uninsured? How would that look? [Editor’s note: Biden has indicated that he intends to reverse the Trump executive orders that, in his estimation, weakened the ACA. One of those orders eliminate the mandate to have insurance, and the resulting penalty for forgoing coverage.]
Dr Hsu: While more people will be covered, Biden is not saying how we will address the existing shortage of primary care providers that is likely to be even more pronounced if his plan is enacted. Will accessibility be hampered? He’s also not telling taxpayers how they will be impacted. His plan is not as aggressive as Medicare-for-All, but it will still be funded by the federal government during a time when we have a historically large deficit. Someone will have to bear the burden.
Dr Owens: That’s right. Biden is not addressing the cost issues or how patients and families will be able to pay for the coverage.
Does Biden’s overarching message—that improving the ACA is a better and more realistic path than Medicare-for-All—resonate?
Ms Andel: The Medicare or Medicaid buy-in option is drawing consistent support from both Democrats and Republicans. That policy seems to actually have some sort of path forward, perhaps even in a second Trump term.
Dr Owens: Americans are happy with their current plans and want to keep them. So, yes, in the near-term, this is what can reasonably be done without major disruption to current systems.
Mr Smith: Incremental change is always more acceptable to Americans unless there is a real crisis, such as there was with WWII in the 1940s or terrorism in 2001.
Mr Sontupe: His message resonates with me, but I am not sure it does with a large portion of the populous. Biden’s plan allows for individuals to purchase more of what they want vs being placed in a population and getting only what’s good for everyone. These days in our society it is all about the me, not the we. Once a population decision negatively impacts individuals, the cries grow very loud.
Buttigieg is saying this to…
Payers: The public option is being implemented. You will maintain your role in the system, but will now have to compete for business, since the public option will be available for employers and individual patients to buy into. Moreover, the government will use its bargaining power to achieve more favorable rates for its customers and patients. And be forewarned: if you do not get your act together and successfully compete with the public option, my plan becomes a glide-path to a single-payer system.
Providers: Keep practicing as you have under the ACA, but with the understanding that you will be treating more patients covered by the government. Additionally:
- Your will no longer be able to bill as an out-of-network provider if your facility is in network.
- Hospital community benefit requirements—which enable you to avoid federal taxes—will be made tougher to ensure you are serving the community.
- Hospitals will be limited from charging more than twice the Medicare rate for out-of-network care.
Patients: The assurance of a more affordable plan will be there for you—and will reach you sooner and with less disruption than full-blown Medicare-for-All. You decide what kind of coverage you want. You will also receive more affordable coverage because we will link subsidies to better gold level plans on the ACA health exchange and cap premiums at 8.5% of income.
Do you agree that the Buttigieg plan accomplishes these things?
Mr Sontupe: I think this is a very interesting concept. If we can’t get aligned and if insurance companies, health systems, pharma, device, and other providers can’t get a more “capitalist” type of system, the government will have no choice but to step in and remove all middlemen. However, it will be difficult to get there.
Mr. Smith: Success will hinge on whether there is enough money in the system to show real savings. What if a large, regional provider doesn’t want to lose money on every patient with the public option? Is the federal government going to force it to accept money losing patients? I doubt that.
Dr Owens: His plan is not significantly different than what Biden proposes. He has a few additional cost management steps. This one folds in the issue of surprise medical billing, which is a hot button for patients and payers.
What is Buttigieg not saying about his plan?
Dr Owens: As with the Biden plan, there is still an affordability issue. One reason that some families don’t have coverage is not the availability of options, but the ability to pay for the coverage and meet the other financial demands of a household.
Mr Smith: Few people who are reasonably happy with their present health insurance will join the public option. Therefore, the actuarial rating of the group in the public option would make premiums very high. It would have a benefit design more like Medicaid, which would not be acceptable to many middle-class Americans.
Does Buttigieg’s overarching message—that his plan is a glide-path to single payer if private payers don’t get their act together—resonate?
Mr Smith: Possibly, for those few Americans who really understand what he’s proposing.
Dr Owens: I think the Buttigieg plan is another variation of the ACA. While it is a reasonable enhancement of what has been in place for a decade now, I do not see it as a pathway to single-payer coverage.
Harris is saying this to …
Payers: For now, your commercial plans will compete with the public option, and you will be able to offer Medicare Advantage-type plans. In 10 years, we will have transitioned to Medicare-for-All and at that time you will be able to participate by offering Medicare Advantage plans.
Providers: Keep practicing as you have under the ACA, but with the understanding that you will be treating more patients covered by the government or Medicare Advantage-type plans.
Patients: The assurance of a more affordable plan will be there for you—and will reach you sooner and with less disruption than full-blown Medicare-for-All. For now, you can choose between private insurance, Medicare, or a Medicare Advantage plan. In 10 years, your choices will be Medicare or Medicare Advantage. Also keep in mind that:
- The tax increases required to transition to Medicare-for-All in 10 years will be lower for more middle-class families than if Medicare-for-All is adopted as stipulated in the Sanders bill.
- Coverage for Medicaid will expand, since under my plan Medicaid will transition to the Medicare-for-All system.
Do you agree that the Harris plan accomplishes these things?
Dr Owens: This seems to be the least aggressive version of the single-payer proposals. The option of buying into a Medicare or Medicare Advantage plans may be attractive to many, especially older individuals who retire early and need a transition from employer sponsored coverage to Medicare. It may foster competition between private and public plans, which ultimately should favor the public sector because of the ability to control cost by legislative mandates. It may be a reasonable transition and does not create the disruption that you would see with Medicare-for-All.
Mr Sontupe: It is smart to model the ideas associated with Medicare Advantage, which is the only plan where most health care incentives are aligned.
Ms Andel: Growth in Medicare Advantage is increasing each year, and it is being driven by the younger Medicare beneficiaries, so the trend looks like it will only continue. About a third of Medicare beneficiaries have affirmatively chosen to receive their Medicare benefits from a commercial plan instead of traditional Medicare. Medicare Advantage offers more predictable cost-sharing, an out-of-pocket spending limit, and additional benefits.
What is Harris not saying about her plan?
Dr Owens: We have never really had public and private plans in a competitive position before, so we don’t know how that will play out. We also know that many hospitals subsidize Medicare losses with commercial revenue. If the case mix shifts dramatically, will some hospital systems fail to survive.
Mr Smith: The way I see it, the Harris plan is just cost shifting to the middle class, and their net tax and medical premiums will rise.
Does Harris’s overarching message—that a more gradual transition to Medicare-for-All that includes private insurer Medicare Advantage plans—resonate?
Dr Owens: Of the ones presented, it is most likely to facilitate a transition.
Dr Hsu: It presents a long-term solution and transition to Medicare-for-All and provides details of this transition. It allows for tax increases, which address funding. The gradual ramp-up will hopefully allow for a good solution to expand funded coverage.