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The “Medicare for All” Continuum: A New Comparison Tool for Congressional Health Bills Illustrates the Range of Reform Ideas
https://www.commonwealthfund.org/blog/2019/medicare-all-continuum
Several 2020 Democratic presidential candidates have called for “Medicare for All” as a way to expand health coverage and lower U.S. health care costs. Replacing most private insurance with a Medicare-like system for everyone has instilled both hope and fear across the country depending on people’s perspective or financial stake in the current health care system. But a closer look at recent congressional bills introduced by Democrats reveals a set of far more nuanced approaches to improving the nation’s health care system than the term Medicare for All suggests. To highlight these nuances, a new Commonwealth Fund interactive tool launched today illustrates the extent to which each of these reform bills would expand the public dimensions of our health insurance system, or those aspects regulated or run by state and federal government.1
The U.S Health Insurance System Is Both Public and Private
The U.S. health insurance system comprises both private (employer and individual market and marketplace plans) and public (Medicare and Medicaid) coverage sources, as the table below shows. In addition, both coverage sources are paid for by a mix of private and taxpayer-financed public dollars.
Most Americans get their insurance through employers, who either provide coverage through private insurers or self-insure. Employers and employees share the cost through premiums and cost-sharing such as deductibles, copayments, and coinsurance. But the federal government significantly subsidizes employer coverage by excluding employer premium contributions from employees’ taxable income. In 2018 this subsidy amounted to $280 billion, the largest single tax expenditure.
About 27 million people are covered through regulated private plans sold in the individual market, including the Affordable Care Act’s marketplaces. This coverage is financed by premiums and cost-sharing paid by enrollees. The federal government subsidizes these costs for individuals with incomes under $48,560.
For 44 million people, Medicaid or the Children’s Health Insurance Program is their primary source of coverage. These public programs are financed by federal and state governments, and small individual premium payments and cost-sharing in some states. In most states, these benefits are provided through private insurers.
Medicare covers 54 million people over age 65 and people with disabilities. The coverage is financed by the federal government along with individual premiums and significant cost-sharing. About 20 million people get their Medicare benefits through private Medicare Advantage plans and most beneficiaries either buy supplemental private insurance or qualify for additional coverage through Medicaid to help lower out-of-pocket costs and add long-term-care benefits.
Millions Still Uninsured or Underinsured, Health Care Costs High
The coverage expansions of the ACA — new regulation of private insurance such as requirements to cover preexisting conditions, subsidies for private coverage on the individual market, and expanded eligibility for Medicaid — lowered the number of uninsured people and made health coverage more affordable for many. But 28 million people remain uninsured and at least 44 million are underinsured. In addition, overall health care and prescription drug costs are much higher in the United States than in other wealthy countries. U.S. health care expenditures are projected to climb to nearly $6 trillion by 2027.
The Medicare for All Continuum
To address these problems, some Democrats running for president in 2020 are supporting Medicare for All. Meanwhile, in Congress, Democrats have introduced a handful of bills that might be characterized as falling along a continuum, with Medicare for All at one end.
As our new Commonwealth Fund interactive tool illustrates, the bills range from adding somewhat more public sector involvement into the system, to adding substantially more public sector involvement. The bills may be broadly grouped into three categories:
- Adding public plan features to private insurance. These include increasing regulation of private plans such as requiring private insurers who participate in Medicare and Medicaid to offer health plans in the ACA marketplaces, and enhancing federal subsidies for marketplace coverage.
- Giving people a choice of public plans alongside private plans. These bills include offering a Medicare-like public plan option through the marketplaces, extending that option to employers to offer to their employees, giving people ages 50 to 64 the option to buy in to Medicare, and giving states the option to allow people to buy in to Medicaid. These bills also bring the federal government’s leverage into provider rate-setting and prescription drug price negotiation.
- Making public plans the primary source of coverage in the U.S. These are Medicare-for-All bills in which all residents are eligible for a public plan that resembles the current Medicare program, but isn’t necessarily the same Medicare program we have today. The bills vary by whether people would pay premiums and face cost-sharing, the degree to which they end current insurance programs and limit private insurance, how provider rates are set, whether global budgets are used for hospitals and nursing homes, and how long-term care is financed. All of the bills in this category allow people to purchase supplemental coverage for benefits not covered by the plan.
Looking Forward
Many Democratic candidates who have called for Medicare for All are cosponsors of more than one of these bills. The continuum of approaches suggests both the possibility of building toward a Medicare for All system over time, or adopting aspects of Medicare for All without the disruption that a major shift in coverage source might create for Americans. We will continue to update the tool as new bills are introduced or refined. Users also can view a comparison tool of other wealthy countries’ health systems, which shows where select countries fall on a continuum ranging from regulated systems of public and private coverage to national insurance programs.
Cartoon – My Problem Is
Cartoon – On the Verge
Cartoon – Don’t Bother Replying
Cartoon – Our CFO
Cartoon – Virtual Prison
Cartoon – Working Remotely
CEO of Hahnemann, St. Christopher’s hospitals ousted
Suzanne Richards, CEO of Hahnemann University Hospital in Center City, Pa., and St. Christopher’s Hospital for Children in Philadelphia, is no longer employed at the organizations, according to The Inquirer.
A spokesperson for Paladin Healthcare, the owner of the two hospitals, confirmed to The Inquirer March 7 that Ms. Richards was dismissed. The spokesperson did not comment on the reason for her dismissal.
Ms. Richards assumed the role two months ago, after several years of experience at hospitals in Southern California.
In 2018, Paladin created an affiliate, El Segundo, Calif.-based American Academic Health System, to buy the two hospitals as well as their related operations from Dallas-based Tenet Healthcare. American Academic Health System replaced several top executives at Hahnemann University Hospital after its purchase.
Segment 8 – Applying Our Values & Philosophy to Healthcare Reform
Segment 8 – Applying Our Values & Philosophy to Healthcare Reform
This segment reviews traditional American values and philosophical principles that can help resolve the core dilemma that has stopped us from fixing US healthcare for years – the unresolved conflict between “social justice” and “market justice.”
In the first six Segments, we reviewed the relentless growth of healthcare spending. And how rising costs are literally built into the system as it is now.
In Segment 7 we talked about some landmines that lurk beneath the surface of fixing healthcare – power and politics.
In this Segment, we will look at traditional American values and at philosophical principles that can help us resolve the core dilemma that has stopped us from fixing US healthcare all these years.
Let’s start with the American traditions. Some of these have been a bit romanticized in our imagination. So we’ll look at each of them in more detail.
Freedom of the individual is pretty clear. It brings to mind the pioneer spirit of early adventurers and settlers.
There is a presumption for rugged individualism and against government entanglement. But even by the time of the Revolutionary War and Constitutional Convention growing colonial cities were developing governmental and civic services like fire departments and sanitation programs.
Free enterprise is a core American value. But here again, there are examples from earliest Colonial days of collective projects, such as the Boston Commons, schools, and toll roads that stood alongside freestanding farms and shops.
Next is “Yankee ingenuity.” Americans are entrepreneurs, innovators, practical problem solvers. We have never been bound by tired old ideas from Europe or elsewhere. We come up with our own ideas and forge ahead with progress. We’ll come back to these concepts.
There is an American tradition to distrust government. But if we look more closely at what this meant to the Founding Fathers, it was not government itself that they distrusted. In fact, Americans never embraced anarchy; they always set up orderly civic structures in every settlement and colony. What they abhorred was tyranny, the concentration of power in the hands of a sometimes capricious and self-serving autocrat. Further, they distrusted any individual person wielding authority. And so the Constitutional Framers crafted a government with the right balance between too much and too little authority, separate branches, and checks and balances. Today’s institutions – including healthcare – will do well to build in the same kind of accountability, transparency and checks and balances, especially since so much money and power is involved.
And so I am going to rename this tradition, Distrust of Tyranny (and of Human Fallibility).
Lastly is our tradition to protect under the law outcasts, the weak, and the vulnerable. Colonial settlers were often themselves oddballs or failures, seeking the opportunity for a new life in America. They enshrined protections for themselves in law, notably the Bill of Rights.
Since a large group of Americans today express misgivings that government involvement in healthcare would be a betrayal of our Founding traditions, I would like to offer several more reflections.
Look at the principles listed in the Declaration of Independence and the Preamble to the Constitution – life, liberty and pursuit of happiness.
More perfect union, justice, domestic tranquility, general welfare, and the blessings brought by liberty to ourselves and our posterity. These sound to me like values that would flow from a people who don’t worry about getting care when they become sick, and who willingly embrace practical healthcare reforms that advance the common good. This is a far cry from the notion that the Framers would have wanted to freeze us into their time – 1788, to be exact. I have a feeling that the Founding Fathers were too practical minded, ingenious and adaptable to lock themselves into even their own ideas. Rather, I think they would try to honor American traditions, compromise over seemingly different viewpoints, seek solutions that bring us together and bind us together, promote the common good, and maximize our freedom, wellbeing (or “welfare,” to use their terminology), and stewardship of our great blessings.
Not to belabor this point, but I’d like to look back at Dr. Benjamin Rush, who we met in Segment 2 as a prominent doctor in the Revolutionary period who signed the Declaration of Independence. Recollect that he received his medical training at University of Edinburgh, the foremost medical school of that time, which in the European system was state-run. He supported publicly-funded mental asylums and is considered to be the father of American psychiatry. In 1794 he was inducted as a foreign member of Swedish Academy of Medicine, which is the historic root of Sweden’s modern-day national healthcare system. Rush supported public health and sanitation initiatives, such as rerouting Dock Creek and draining its surrounding swamp on the east side of Philadelphia to eliminate mosquito breeding grounds. He established a public dispensary for low income patients. And he founded the Pennsylvania Prison Society to protect rights of prisoners and promote their humane treatment.
Based on this profile, I don’t think it’s a stretch to believe that this 18th century Founding Father might support innovative public and private partnerships ensuring healthcare for all citizens if a time machine could transport him into the 21st century.
Now let’s now look at what some healthcare philosophers in this century say about fair ways to run the system. The basic principles of healthcare ethics are autonomy (which is self-determination), justice (fair distribution of costs and benefits), beneficence (the most good for all), and professional integrity (meaning that society has a stake in the independence of doctors).
One philosopher who has applied these principles to modern healthcare is Paul Menzel from Pacific Lutheran University in Washington state.
He has been writing on the ethics of the healthcare system since 1983, when he came to Washington DC to apply his philosopher’s methodology to the issue, until his retirement in 2012. Here are his view of the features of a fair system of healthcare delivery and financing.
- The system should provide costworthy care, and costworthy care only, no wasteful treatments.
- The system should provide financial protection to sick individuals who need care.
- The system should make health care equitably accessible to all.
- The system should equitably distribute the costs of care between the ill and the well
- The system should justly allocate the costs of care between the rich and the poor.
- The system should respect autonomy of patient choice.
- The system should respect provider choice.
Two other philosophers, one an ethicist and the other a doctor, have laid out fair, publicly acceptable ways to set limits on healthcare spending. There needs to be:
- Open, transparent deliberations
- Use of relevant criteria agreed on by all
- An appeals procedures for individual extenuating cases.
- Uniform standards and regulations applying to all delivery and financing systems.
Let’s end on a key philosophical controversy in the US – market justice versus social justice. Market justice means, in starkest form, that consumers can buy only what they can afford, and that giving them something they have not earned is ethically and economically wrong. Social justice sees equitable distribution of health-care as a societal responsibility, without regard to ability to pay. (Note that I am purposely avoiding the loaded words – “rights” and “privileges,” which tend to inflame this controversy.)
It has been said that progress on healthcare reform is stymied by our country’s inability to choose one or the other – we’ve been caught between the two ideas of justice.
In the next Segment I will ask whether the two sides of the argument can come together. Does it need to be either-or? Or can we blend market justice and social justice? Can the US take what’s best from both the commercial business world and the public sector world?
My answer is Yes. And we’ll look at a successful plan that did just that 20 years ago.
I’ll see you then.
HENRY KOTULA 