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Why Bernie Sanders’s plan for universal health care is only half right
Sen. Bernie Sanders plans to introduce his universal health care bill Wednesday; it is likely to serve as a litmus test for Democrats with presidential aspirations. The legislation is bold and simple, which makes it very appealing. A recent survey by the Pew Research Center found that 60 percent of Americans believe the federal government should ensure health coverage for all Americans.
But Sanders’s bill only gets it half right.
The part that’s right is that every American would automatically get health insurance. If that came to pass, the door would be open to lowering costs while eliminating the highly complex regulations needed to police our current system and the inequitable tax treatment that sustains it.
The part that Sanders gets wrong is that he would turn Medicare into a single-payer system for all, supplanting private insurers.
That approach has lots of problems, not least of which is an enormous price tag. Consider what happened in California earlier this year when the state legislature briefly considered a single-payer bill. An appropriations committee estimated it would cost $400 billion, over twice the state’s annual budget. Such complications make the Sanders bill — and other Medicare for all proposals — virtually impossible to enact.
People also forget that Medicare is a hidebound system. It took Congress more than 40 years to offer a prescription drug benefit, for example. Physicians are paid using an arcane system developed decades ago and that has now ballooned to more than 140,000 procedure codes, all of which is supervised (and gamed) by physicians themselves. Standard private sector cost-saving measures, like competitive bidding for routine services, are rarely used.
There is a better way — called universal catastrophic coverage — which borrows from both progressive and conservative playbooks. It would combine the federal guarantee of insurance for all with the cost-controlling benefits of insurers competing for that business.
From the consumer viewpoint, universal catastrophic coverage would look like this: All Americans not covered by Medicaid and Medicare would be placed in a single, massive risk pool. The government would assume the risk of insuring everyone, using a high-deductible policy that would guarantee that no one would be without care in the event of a health care crisis.
To keep the plan progressive and affordable for all, deductibles would be tied to income. Services that are very effective would be exempt from the deductible and fully covered. This includes many prevention services — like flu shots — but also medications for chronic disease, certain vaccines, and the like.
This would eliminate a host of problems in the current system: no more worries about preexisting conditions, no more losing insurance when changing jobs, no more mandated buy-in, and no more upward spiraling of premiums for those buying policies because healthy people are staying uninsured and not paying their share.
From the point of view of insurers, the new system would look like Medicare’s prescription drug plan, in which they compete for market share by offering different networks, deductibles, premiums, and supplemental coverage.
A version of universal catastrophic coverage that I devised with my colleague, Kip Hagopian, would cost the government about 15 percent less than the Affordable Care Act while insuring 115 million more people, according to a RAND study. Premiums would be about $3,000 annually, about 40 percent less than the ACA silver plans.
This approach borrows from liberal dreams for health care as a right, and from conservative conviction that market forces are the most efficient way to deliver health care and keep costs under control. That is why both sides can support it.
Being bold means asking for big changes. The current system of employer-based insurance would lose its tax-protected status, which currently costs the federal government $236 billion (about the same as the mortgage interest deduction, charitable deductions, and retirement benefit exclusions combined, according to the Tax Policy Center). Those savings would be used to underwrite the new system.
Vested interests will find many reasons to oppose change. But the bottom line is that we can cover everyone if we are smart about it.
The Single Payer Debate
The seismic shift in support for Sen. Bernie Sanders’ plan to transform the U.S. health care system into a single-payer program indicates the reach the Vermont independent has within the Democratic Party.
At the same time that his onetime presidential foe Hillary Clinton is reminding people of the party’s devastating loss last fall, Sanders is trying to define its future. His bill to enroll every American in Medicare drew 16 co-sponsors, 16 more than when he first introduced similar legislation in 2013.
It has garnered support from possible 2020 Democratic presidential hopefuls — Sens. Cory Booker of New Jersey, Kamala Harris of California, Elizabeth Warren of Massachusetts and Kirsten Gillibrand of New York — as well as Sen. Tammy Baldwin of Wisconsin, an incumbent up for re-election next year in a state narrowly won by President Donald Trump.
It also provided a welcome talking point for Republicans who have long railed against government-run health care. Several GOP senators used Sanders’ legislation as a tool to warn voters of what could come if Republicans are unable to overhaul the health care system.
‘A political crisis’
During a bill introduction Wednesday that felt more like a campaign rally than the standard press conference, Sanders — flanked by co-sponsors — stuck to his standard script of bashing Republicans and special interest groups for doing nothing to address rising health care costs.
“The crisis we are discussing is not really about health care,” he told a crowded room of activists and supporters. “The crisis we are discussing today is a political crisis which speaks to the incredible power of the insurance companies, the drug companies and all those who make billions of dollars off of the current system.”
The politics of “Medicare for all” are divisive. And aside from a short comment about raising taxes across the board, Sanders has yet to outline a clear way to pay for such a system.
There is a divide within the Democratic Party on how to define such a system, and many Senate Democrats have yet to voice their support for Sanders’ plan, including vulnerable incumbents up for re-election such as Sen. Joe Manchin III of West Virginia.
Despite those differences, however, the expanding coalition of Democrats who now back such a proposal is a display of just how Sanders, who gave Clinton a serious challenge for the presidential nomination, continues to influence the national party.
“Sen. Sanders’ presidential campaign was a phenomenon that very few people saw coming. It uncovered a groundswell of progressive activation that the party now rightly wants to tap into as we head into 2018 and 2020,” Connecticut Democratic Sen. Christopher S. Murphy said. “I think that Democrats now feel a little freer to imagine some even bigger and bolder ideas.”
Asked whether the growing support for his legislation is indicative of his influence, Sanders hedged.
“Right now, we are focusing on what the bill is about,” he said. “We’ll talk about the politics of it later.”
A national message?
Several other Democratic senators supported the national party embracing more bold ideas — like Medicare for all — in the fallout from the 2016 election and tied that movement directly to the success of Sanders’ campaign.
“It’s an idea whose time has come. There’s a clear recognition that universal coverage has to be the goal,” Democratic Sen. Richard Blumenthal of Connecticut said. “These principles are now in the public mind, front and center, and that is due, in part, to the prominence that Bernie Sanders gave to them during the campaign.”
A Democratic aide echoed those thoughts and said the shift is indicative of a recognition that the party needs to be bolder and sharper in its proposals.
“I think there will be a lot of support for this bill,” the aide said. “It’ll make the clear contrast between the two parties on health care even more clear.”
While the Sanders proposal has gained more support among members of the Democratic conference, skeptics remain.
“The Sanders bill requires people to give up their insurance. It’s not an option that you buy in. It requires people to give up the insurance,” Sen. Claire McCaskill of Missouri said. “I’ve been down the road of requiring people to do things the government says on insurance and it is a road paved with big rocky boulders.”
Asked whether she correlates the growing support for Medicare for all to Sanders’ popularity among liberals, McCaskill — who is up for re-election in 2018 in a state Trump won easily — said she had not analyzed it from that perspective.
“I just think we’ve got to think this through and not make this some kind of political litmus test,” she told Roll Call.
While other Democratic lawmakers also said they hoped support for the Sanders bill would not be a political benchmark for the party, several openly said endorsing the concept would be crucial for any successful candidate.
“I have trouble seeing how a viable Democratic candidate does not support the idea of single-payer,” Blumenthal said. “This bill is going to drive the national message.”
Bernie-Care barrier?
Some Senate Republicans, who this summer failed in their attempt to repeal and replace the 2010 health care law, are making a last-ditch attempt to overhaul it.
Sens. Bill Cassidy of Louisiana, Lindsey Graham of South Carolina, Ron Johnson of Wisconsin and Dean Heller of Nevada are pushing legislation that would transform the health care system to essentially a large federal block grant to the states based on the size of their individual insurance pool.
Their message to the Republican conference was clear: It’s either our plan or Sanders’ proposal.
“If you want a single-payer health care system, this is your worst nightmare,” Graham said. “Bernie, this ends your dream of a single-payer health care system for America.”
Republican leadership echoed that message.
“We see what the alternative is and hopefully that’ll focus the mind,” Senate Majority Whip John Cornyn said. “Their party is clearly lurched to the left even further, and it’s made it hard for otherwise pretty pragmatic people, like Chuck Schumer, to do deals which he ordinarily would do with Republicans.”
But for Sanders, the failed attempt by the GOP to overhaul the current health care law only bolsters his case.
“To my Republican colleagues, please don’t lecture us on health care,” he said. “You, the Republican Party, have no credibility on the issue of health care.”
GOP Sees Offensive Opening on Health Care for 2018
Republicans plan to tie all Democrats to “Medicare for all” proposals.
As more and more Democrats come out in favor of some form of “Medicare for all” legislation, Republican campaign strategists are salivating.
In much the same way the GOP has tried to tie all Democrats to House Minority Leader Nancy Pelosi in attack ads, they’re planning to tie all Democratic incumbents and challengers to different proposals from Vermont independent Bernie Sanders in the Senate and Michigan Rep. John Conyers Jr. in the House, regardless of whether they’ve personally embraced those policies.
“I’m thrilled,” said Corry Bliss, executive director of the Congressional Leadership Fund, the leadership-backed super PAC that plans to spend $100 million to help Republicans keep their House majority in 2018.
“I love their new policy so much that I’m thinking about taking the $50 or so million I was planning on spending on attacking Nancy Pelosi and putting a small portion toward explaining how single-payer hurts the American people,” Bliss said Tuesday.
That strategy isn’t much different from the GOP strategy of the past seven years, when the party has gone after Democrats on the 2010 health care law. But after months of their own health care legislative failures, Republicans think they finally have an offensive opening on health care again.
“It’s first time we’ve been in that position in a long time,” said one GOP campaign strategist, who acknowledged that this year’s health care debate revived the 2010 law.
Attacking all Democrats
The National Republican Congressional Committee was especially vocal on Wednesday, with a digital ad and a slew of press releases trying to pin Sanders’ proposal on Democratic incumbents and challengers.
“Studies reveal that single-payer would cost taxpayers a staggering $32 trillion over the next ten years,” the releases say, all pointing to the same study from the Urban Institute from May 2016.
“Sanders and Pelosi are leading their members down a path with nowhere to turn but left,” NRCC communications director Matt Gorman said in a statement.
In reality, Pelosi has shied away from Medicare for all proposals, trying instead to keep her caucus’ focus on improving the 2010 health care law. Her reticence toward the issue is a fact Republicans sometimes highlight to underscore its unpopularity — as in, “This is such a bad idea, Nancy Pelosi doesn’t even support it.”
But when it comes to messaging against the proposals, Republicans are happy to include Pelosi — a perpetual boogeyman — to help tie the issue around the neck of all Democrats.
California Rep. Scott Peters, a member of the moderate New Democrat Coalition and chairman of the group’s PAC, brushed aside the threats of those kinds of attacks.
“That won’t be a very effective campaign technique. People understand where we are,” he said, walking down the House steps Wednesday afternoon. Peters, an NRCC target in 2018, doesn’t support the Conyers legislation.
But with a majority of House Democrats signing onto it, and many 2020 hopefuls embracing the Sanders plan in the Senate, Republicans see it as nationalized party issue they can apply down ballot to all candidates.
“This is going to help frame the choice next year,” Bliss said. “It will be a huge issue in every single district that we spend in next year.“
One Republican admitted, though, it may be harder to message against a Democratic proposal that doesn’t stand a chance of becoming law anytime soon and doesn’t have a Democratic president behind it.
“I don’t think it will get to the same level as Obamacare did in the 2010 cycle,” the GOP strategist said. “You don’t have the same boogeyman in President Obama and Pelosi.”
Still, Republicans hope the issue will help them by pushing Democratic candidates to the left and sinking nominees in red districts or states won by President Donald Trump last fall.
In Wisconsin, where Trump eked out a win, Sen. Tammy Baldwin has come out in support of Sanders’ legislation. She’s the only senator up for re-election in a state the president won to have signed onto the Sanders’ proposal.
Trump has called for “insurance for everybody,” but Republicans say it’d be very easy to message against a Medicare for all plan to his voters.
“Here’s a socialist idea where everyone gets the same thing,” the GOP strategist said. “That doesn’t play.” It doesn’t fit with what she called the “you deserve more” narrative that Trump pushed to working-class voters during the campaign.
Keeping up the heat
Democrats aren’t backing away from their own offensive attacks on health care, trying to make the GOP-controlled Congress own their repeal-and-replace efforts.
That continued on Wednesday, with the introduction of the Senate Republicans’ latest effort at repealing the 2010 health care law.
“The 2018 election will be a referendum on the toxic GOP health care plan that spikes costs and strips coverage,” said David Bergstein, spokesman for the Democratic Senatorial Campaign Committee.
And they’re skeptical that this week’s attention on the Medicare for all legislation will take away from what a GOP-controlled Congress has been able to do — or not do — on health care this year.
“To have that be their golden ticket out of the nightmare they face right now seems just insane,” one Democratic operative said.
The Politics of Single Payer Healthcare
The pros for Democrats:
- As the chart shows, single payer is popular among Democrats, with about two thirds in favor. But it has also gained popularity among independents in recent years, with over half supporting it. Republicans, not surprisingly, aren’t so crazy about it.
- Single payer is a big idea many Democrats can rally around. It excites the base and party activists by establishing health care as a right, achieving universal coverage, and eliminating insurance companies. This analysis is about politics, but most advocates of single payer advance the idea because they believe in it, not as a political calculation.
The cons for Democrats:
- They could lose a one-time opportunity to tar Republicans with the damage their ACA replacement plan would have done to millions of people, according to the multiple analyses that showed lost coverage and higher premiums for vulnerable people.
- By campaigning on their own sweeping health reform plan, Democrats could give Republicans a fighting chance to change the subject.
- More targeted policy ideas, such as Medicaid buy-in options for the ACA marketplaces and a Medicare buy-in for 50-64 year olds, could also be popular on the left and the center, while offering far smaller targets than a sweeping single-payer plan would.
Reality check: Single payer is popular, but polling today doesn’t tell us much about where the public will be if there is a national debate about actual single-payer legislation in the Congress. ACA repeal had the support of about half the public in Kaiser Family Foundation polling in late 2016 and early 2017, but fell to closer to 30 percent once there was an replacement plan under the microscope.
Support for single-payer falls by 10 to 20 percentage points when people are read common criticisms, such as that it will increase taxes or give the government too much control over health care. Arguments in favor, including that single payer will make health a basic right or reduce administrative costs, increase support by similar amounts.
We cannot simulate what will happen in a real debate, which depends on the actual details of the legislation and the power of the arguments made.
Be smart: This is more than just a health policy debate. It is also a proxy debate about the future of the Democratic Party. The party can swing left trying to build energy in the base, or it can move to the center, trying to capture the votes of many of the more conservative working people who voted for President Trump.
Don’t forget: Most Americans are far less focused on sweeping health policy ideas than they are on lowering their out-of-pocket costs. Health reformers – left, right, or center – who make the connection between their policy ideas and these pocketbook concerns may capture the most voters.
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HENRY KOTULA 