‘Medicare for All’ Divides Democratic Presidential Field: Not Everyone Agrees It Is the Solution

September 3, 2019 by Dan McCue

WASHINGTON – In 2018, centrist Democrats flipped 38 seats previously held by Republicans in part because they vowed to protect the Affordable Care Act against the GOP’s repeated attempts to dismantle it.

Many expected a repeat heading into the 2020 election cycle. After all, health care – particularly ObamaCare – was a winner that enabled Democrats to regain control of the House. Then things got complicated.

Led by Sens. Bernie Sanders, I-Vt., and Elizabeth Warren, D-Mass., a number of White House hopefuls rallied behind “Medicare for All,” a system under which all Americans would get insurance from one government plan.

Among those casting a wary eye on all this was former Vice President Joe Biden, the front runner in the Democratic presidential primary field, who has compared the plan to repealing the Affordable Care Act. 

“I think one of the most significant things we’ve done in our administration is pass the Affordable Care Act. I don’t know why we’d get rid of what in fact was working and move to something totally new,” Biden said during a recent campaign swing in New Hampshire.

He went on to say that some in the Medicare for All fold haven’t fairly acknowledged the consequences of their proposals. The exception, he said, was Sanders.

“Bernie’s been very honest about it,” Biden said. “He said you’re going to have to raise taxes on the middle class. He said it’s going to end all private insurance. I mean, he’s been straightforward about it. And he’s making his case.”

Having a harder time in defining where she stands is Sen. Harris.

In June, during the first Democratic debate, Sanders, Warren and Harris raised their hands when the candidates were asked as a group whether they supported eliminating private insurance.

The next morning, Harris changed her answer — the second time since her campaign launch that she’d walked back her seeming endorsement of eliminating private insurance.

She explained she interpreted the debate moderator’s question as asking whether she’d be willing to give up her existing coverage as part of a single-payer model. She said she wants private policies to remain “supplemental” options for consumers.

Harris has also drawn fire for proposing a 10-year phase-in for her plan, meaning her Medicare for All program wouldn’t  be fully implemented until two years after she left office — presuming she were elected to a second term as president.

Proposal Called Political Suicide

Biden has not been alone in his criticism of Medicare for All. Former Colorado Gov. John Hickenlooper, who recently left the race and is now running for the U.S. Senate, warned that no matter how it shakes out, Republicans will continue to brand the plan as a form of “socialism,” hurting Democrats up and down the ticket in the general election.

Colorado Sen. Michael Bennet meanwhile has echoed Biden’s call to “finish the work we started with Obamacare” and forego the middle class tax increases that will inevitably be needed to keep Medicare for All afloat.

But perhaps most remarkable of all has been the objections raised by former Congressman John Delaney, of Maryland.

Delaney has said that while Medicare for All might make for a popular slogan, “it is political suicide.”

While he acknowledges the current health care system needs improving, Delaney argues that Medicare for All as proposed by Sanders and the others runs counter to the free-market, and that will prove to be a serious flaw over time.

“Overwhelming evidence shows that, under Medicare, the government doesn’t pay the true costs of health care,” Delaney wrote in a Washington Post editorial. “According to data from the Urban Institute, Medicare pays providers 89 percent of costs, with higher reimbursements from private insurance companies making up the difference.”

In the absence of those reimbursements, “health-care providers are not going to pursue or maintain a business model that loses money.”

Delany maintains the Democratic nomination shouldn’t go to anyone who supports Medicare for All and that the proposal shouldn’t be in the party’s 2020 platform.

“If we Democrats become the party of Medicare for All, advocating that every U.S. citizen is forced into a government-run health insurance program, President Trump will be reelected and Republicans will control both houses of Congress — ensuring that today’s health-care system will be endangered by renewed GOP attacks,” Delaney said.

While there is some disagreement over Delaney’s remarks in the health-care industry, the American Hospital Association does agree that switching to Medicare for All “would upend a system that is working for the vast majority of Americans, and throw into chaos one of the largest sectors of the U.S. economy.”

In written testimony submitted to the House Budget Committee in June, the association, which represents 5,000 hospitals and affiliated health care providers, said even in an ideal situation, where reimbursement rates remained about where they are today, “experience suggests that the government does not always act as a reliable business partner.

“Delays in payment and retroactive changes to reimbursement policies leave providers at risk of inadequate payment. Politicization means that providers cannot always trust that the rules of today will be the rules of tomorrow, which presents a challenging – if not impossible – environment for large, complex organizations,” the association said.

“Finally, moving to a single-payer model would be highly disruptive not only to health coverage, but also to the broader economy,” the organization said. “Approximately 90 percent of Americans are currently enrolled in comprehensive coverage with high rates of satisfaction. Not only would this move more than 250 million people into some new form of coverage, it could radically alter the coverage of the more than 55 million people currently enrolled in the Medicare program, including the tens of millions who have voluntarily opted to enroll in Medicare Advantage, which would no longer exist.”

In The End, Who Pays?

Candidates, by necessity, are somewhat vague in making sweeping proposals, it’s difficult to get a read on what Medicare for All will really mean in terms of coverage and related costs.

For instance, when Sanders put out a white paper on his proposal earlier this year, it included only possible options for financing it. These included a 4-percent income-based premium on household income above $29,000; a 7.5-percent income-based premium paid by employers that exempts the first $2 million in payroll; a wealth tax; and an expansion of the estate tax.

Harris has said she thinks Sanders has a lot of good ideas on this front, “especially making the top 1 percent and corporations pay their fair share through a more progressive income, payroll, and estate tax.”

But she continues to refrain from any suggestion that average Americans will have to pay for their health care under her plan. She flatly rejects Sanders’ 4-percent income-based premium on household income above $29,000, saying it “hits the middle class too hard.”

“That’s why I propose that we exempt households making below $100,000, along with a higher income threshold for middle-class families living in high-cost areas.”

To make up the difference, Harris has proposed taxing Wall Street stock trades at 0.2 percent, bond trades at 0.1 percent, and derivative transactions at 0.002 percent.

Biden, who has yet to introduce his full health care plan, disputes that Harris’s plan wouldn’t require tax increases for the middle class.

In the end, of course, that will come down to the actual cost of Medicare for All, if such a plan is implemented.

Appearing at an event hosted by The Washington Post in July, Sanders said his plan will cost between $30 and $40 trillion over 10 years, though he argues that it would be less expensive  than Obamacare over that period.

In 2016, as Sanders pursued his insurgent campaign for the Democratic nomination against former Secretary of State Hillary Clinton, analysts estimated his Medicare for All plan would cost between $25 trillion to $36 trillion.

“Importantly, these totals represent the increased cost to the federal government, not the change of total national health expenditures,” an analysis by the Committee for a Responsible Federal Budget says.

Those costs would depend on whether the increased cost of expanding coverage is larger or  smaller than the amount saved from lower provider payments, drug payments, and administrative spending, the analysis said.

The committee, a fiscal watchdog, also said its analysis did not include an assessment of the plan’s impact on the ballooning national debt because it had no way of knowing how much funding the government might choose to raise through premiums, taxes, or both.

It noted however that Sanders’ 2016 Medicare for All plan included $11 trillion in tax increases, enough to fund more than one-third of the program.

“While any new revenue would in part be replacing current premiums, identifying pay-fors still remains a challenge,” the Committee said at the time. “Enacting this type of Medicare for All would mean increasing federal spending by about 60 percent (excluding interest), and financing a $30 trillion program require the equivalent of tripling payroll taxes or more than doubling all other taxes.”

In the end it recommended supporters of Medicare for All should either work to identify new revenue, premiums and spending cuts to finance new federal costs or scale back the proposal if they are unable to identify sufficient funding.

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