Tag Archives: Medicare for All

Back to the Health Policy Drawing Board

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The Affordable Care Act needs help. After scores of failed repeal attempts, Congress enacted legislation late last year that eliminated one of the law’s central features, the mandate requiring people to buy insurance.

Obamacare, as the Affordable Care Act is widely known, isn’t in imminent danger of collapse, but the mandate’s repeal poses a serious long-term threat.

To understand that threat and how it might be parried, it’s helpful to consider why the United States has relied so heavily on employer-provided insurance — and why it has not yet adopted a form of the universal coverage seen in most other countries.

First, some basics on private insurance: It works well only when many people, each with a low risk of loss, buy in. Most homeowners buy fire insurance, for example, and only a small fraction file claims annually. A modest premium can therefore cover large losses sustained by a few.

But because of what economists call the adverse-selection problem, this model can easily break down for private health insurance. People typically know more about their own health risks than insurers do, making those most at risk more likely to purchase insurance.

This drives premiums up, making insurance still less attractive to the healthiest people. That, in turn, causes many to drop out, producing the fabled “death spiral” in which only the least healthy people remain insured. But at that point, private health insurance may no longer be viable, because annual treatment costs for serious illnesses often exceed several hundred thousand dollars.

Most nations have solved this problem by adopting universal coverage financed by taxes. The United States probably would have followed this approach except for a historical anomaly during World War II. Fearing runaway inflation in tight labor markets, the American government imposed a cap on wages.

But the cap didn’t apply to fringe benefits, which employers quickly exploited as a recruiting tool. Employer health plans proved particularly attractive, since their cost was a deductible expense and they were not taxed. Before the war started, only 9 percent of workers had employer-provided insurance, but 63 percent had it by 1953.

To be eligible for favorable tax treatment, companies were required to make their plans available to all employees, which mitigated the adverse-selection problem. People would lose insurance if they lost their jobs, which inhibited labor mobility, but since employment relationships were relatively durable in the postwar years, this arrangement worked well enough.

But after peaking at almost 70 percent in the 1990s, employer coverage began declining in the face of stagnating wages and rising insurance costs. By 2010, only 56 percent of the nonelderly American population still had workplace health plans.

Even so, because more than 100 million Americans still had such plans and were reasonably satisfied with them, the Obama administration opted to build health reform atop the existing system. In addition to allowing people to keep their existing employer coverage, Obamacare expanded eligibility for Medicaid and established exchanges in which people without employer plans could buy insurance.

At the outset, Obamacare had three central features:

• Insurers could not charge higher prices to people with pre-existing conditions.

• Those without coverage had to pay a penalty to the government (the “mandate”).

• Low-income people would be eligible for subsidies.

The first two provisions were necessary to prevent the death spiral, and government couldn’t mandate insurance purchases without adding subsidies for the poor.

Despite a bumpy rollout and some frustrations over shrinking choices and rising prices at health care exchanges, Obamacare was working remarkably well by most important metrics. Program costs were much lower than expected, and the uninsured rate among nonelderly Americans fell sharply — from 18.2 percent in 2010 to only 10.3 percent in 2018.

This progress is now imperiled.

The mandate — by far the program’s least popular provision — was repealed as part of tax legislation passed in December 2017. And because economists predict that its absence will slowly rekindle the insurance death spiral, we’re forced back to the policy drawing board.

The most common response has been to call for a variant of the single-payer systems employed by most other countries, which promise dramatic reductions in health costs.

The United States spends far more on health care than any other nation, yet gets worse outcomes on most measures. In part this is because administrative and marketing expenses are much lower under single-payer plans. But by far the most important source of savings is that governments are able to negotiate much more favorable terms with service providers. Virtually every procedure, test, and drug costs substantially more here than elsewhere.

An American hospital stay, for example, costs more than twelve times as much as one in the Netherlands. The single-payer approach also sidesteps the thorny mandate objection by covering everyone out of tax revenue.

A June 2017 poll showed that 60 percent of Americans said the government should provide universal coverage, and support for single-payer insurance rose more than one-third since 2014.

Yet a move to a single-payer system faces the same hurdle that shaped Obamacare: Millions of Americans would resist any attempt to take their employer-provided plans away. And although single-payer health care would be far less costly overall, it would be paid for by taxes — the most visible form of sacrifice — rather than by the implicit levies that underwrite employer coverage.

From a purely economic standpoint, the increased tax burden is irrelevant. It’s a truism that making the economic pie larger necessarily makes it possible for everyone to get a larger slice than before. And because the gains from single-payer insurance would be so large, there must be ways to make everyone come out ahead, even in the short run.

The Yale political scientist Jacob Hacker, for example, has proposed the introduction of Medicare Part E (Medicare for Everyone), which would allow anyone to buy into Medicare, regardless of age. The program’s budget would be supported in part by levies on employers that don’t offer insurance.

The cost savings inherent in this form of single-payer coverage would lead more and more firms to abandon their current plans voluntarily. Gradually, the age for standard Medicare eligibility also would fall until the entire population was covered by it. The Center for American Progress has now introduced a similar proposal.

It’s critical to realize that there are attractive paths forward. In no other wealthy country do we see people organize bake sales to help pay for a neighbor’s cancer care. We can avoid this national embarrassment without requiring painful sacrifices from anyone.

 

 

Democrats considering a new strategy to expand health coverage as frustrations build with Obamacare

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http://www.latimes.com/politics/la-na-pol-democrats-healthcare-agenda-20180227-story.html

Democrats considering a new strategy to expand health coverage as frustrations build with Obamacare

After spending most of 2017 defending the Affordable Care Act from GOP attacks, a growing number of Democrats believe the law’s reliance on private insurance markets won’t be enough and the party should focus instead on expanding popular government programs like Medicare and Medicaid.

The emerging strategy — which is gaining traction among liberal policy experts, activists and Democratic politicians — is less sweeping than the “single-payer” government-run system that Sen. Bernie Sanders (I-Vt.) made a cornerstone of his 2016 presidential campaign.

Many Democrats still fear such a dramatic change would disrupt coverage for too many Americans, but they have also concluded that the current law’s middle-ground approach to build on the private insurance market — originally a Republican idea — isn’t providing enough Americans with adequate, affordable health coverage.

These Democrats see the expansion of existing public programs as a more pragmatic and politically viable way to help Americans struggling with rising costs and correct the shortcomings of the 2010 law, often called Obamacare.

 “What is clear is that the Democratic Party as a whole is coming to the conclusion that stand-alone private market solutions to healthcare do not achieve affordability and coverage for all,” said Chris Jennings, an influential Washington health policy advisor who worked for Presidents Clinton and Obama.

“But there is a recognition that you can’t just snap your fingers and have political consensus. … And one of the lessons learned from 2017 is that you better do your homework.”

Democrats are eager to avoid mistakes made by Republicans, who proved unprepared last year as they struggled unsuccessfully to fulfill their years-long promise to repeal the current health law.

Developing a new healthcare agenda doesn’t promise to be easy, as liberal activists and others in the progressive wing of the Democratic Party remain committed to the single-payer solution championed by Sanders and may resist more incremental steps.

At the same time, even more modest moves to build on Medicare or Medicaid will face opposition from hospitals, drugmakers and others in the industry who fear that government health plans would pressure them to accept lower prices.

And no one expects any Democratic plan to go anywhere as long as Congress remains in Republicans’ hands and Trump holds a veto pen.

But in the wake of widespread public rejection of GOP healthcare proposals last year, Democrats see an opportunity to seize the initiative and advance the party’s long-held dream of universal health coverage.

“We’re on offense on healthcare,” said Brad Woodhouse, campaign director for Protect Our Care, an advocacy group formed last year to fight the GOP effort to roll back the 2010 health law. “We need to make healthcare the No. 1 issue.”

Speaking to a recent conference organized by Families USA, a leading national patients’ rights group, Woodhouse cautioned, however, that Democrats must offer voters more than just a defense of the current law.

In recent months, Democratic lawmakers on Capitol Hill have filed a growing number of bills that would expand eligibility for Medicare or Medicaid, which currently limit coverage to qualifying elderly, disabled or poor Americans. The two mammoth government programs are much cheaper than commercial insurance, in large part because they pay hospitals and other medical providers less.

In January, a group of influential liberal health policy experts gathered in Washington to explore these proposals, which typically would allow younger, wealthier consumers to “buy into” one of the two programs.

At the same time, Democratic leaders in several states, including California, New York and New Mexico are exploring state-based initiatives to expand government health plans.

And last week, the Center for American Progress, a leading liberal think tank, released a plan to open up Medicare to all Americans, while still giving workers the option to stick with coverage offered through an employer.

“Democrats have mostly been trying to keep Republicans from repealing the current law,” said Sen. Tim Kaine (D-Va.). “Now we need to come up with the next set of ideas about how to improve coverage and affordability.”

Kaine and Sen. Michael Bennet (D-Colo.) are cosponsoring yet another proposal — which they call Medicare X — for a new government program based on Medicare, particularly for consumers in parts of the country with limited commercial options.

The renewed interest among Democrats in government health insurance has buoyed the hopes of those who support a more ambitious push to create a single public health plan for everyone.

“What has been happening in the last few years is that millions of working people and young people are getting involved in the party … and the grassroots movement is overwhelmingly clear about what it wants from healthcare,” Sanders said in an interview.

“That means that the debate over Medicare-for-all changes, and I think that is what is happening now.”

Indeed, Sanders’ Medicare-for-all bill, which would create a new government plan like Medicare for everyone, has drawn support from nearly every major Democrat in the Senate who is expected to seek the 2020 presidential nomination.

But many Democrats who aspire to something like Sanders’ proposal still worry about the cost and disruptions that would likely be necessary to create a large new government plan for everyone.

“I share the desire for universal coverage,” said Bennet. “The question is what approach is more practical to achieving that objective.”

Nearly a decade ago, Democratic leaders, concerned about the politics of expanding government health plans too aggressively, created the Obamacare insurance marketplaces, which rely on private insurers to provide coverage for Americans who don’t get health benefits through an employer or through a government program.

Democrats even rejected a proposal for a limited government plan to be sold on the marketplaces as a “public option.”

But the ceaseless GOP attacks on the marketplaces, which had been a conservative idea, and the failure of private health insurers to make more affordable plans available — even before Trump took office — has caused more Democrats to back a bigger role for government.

“That is a huge shift,” said Jacob Hacker, a Yale political scientist who helped develop the public option proposal.

Further emboldening Democrats is growing evidence that the public overwhelmingly supports existing government health plans, especially in the face of GOP threats to scale them back.

Eight in 10 Americans held a positive view of Medicare in a recent nationwide poll by the nonprofit Kaiser Family Foundation.

And majorities of both parties favor allowing more people to buy into the program, the survey found.

Medicaid enjoys similarly broad support, with three-quarters of Americans expressing a favorable view.

By contrast, the GOP proposals to roll back the 2010 health law and slash funding for Medicaid were overwhelmingly unpopular, drawing support from just one in five Americans in several nationwide polls.

Even supporters of this emerging Democratic healthcare agenda acknowledge it will take years to develop and may not be fully debated until the campaign for the 2020 Democratic presidential nomination gets underway next year.

But many say it is not too early to begin planning.

“We saw support for Medicaid [during the 2017 GOP repeal push] that took even many longtime Medicaid advocates by surprise,” said Rep. Ben Ray Lujan (D-N.M.), who is sponsoring a proposal with Sen. Brian Schatz (D-Hawaii) to allow people to buy into the Medicaid program.

“There is an opportunity now to build on that momentum,” Lujan said.

 

 

Why Do People Hate Obamacare, Anyway?

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https://khn.org/news/why-do-people-hate-obamacare-anyway/

The Affordable Care Act, aka “Obamacare,” has roiled America since the day it was signed into law in 2010. From the start, the public was almost evenly divided between those who supported it and those who opposed it.

They still are. The November monthly tracking poll from the Kaiser Family Foundation found that 50 percent of those polled had a favorable view of the health law, while 46 percent viewed it unfavorably. Partisan politics drives the split. Eighty percent of Democrats were supportive in November, while 81 percent of Republicans were strongly negative. (Kaiser Health News is an editorially independent program of the foundation.)

That helps explain why Republicans are working to repeal a key element of the health law in the tax bill Congress is negotiating. The requirement that most Americans have health insurance or pay a tax penalty — the so-called individual mandate — is by far the most unpopular provision of the law, particularly among Republicans.

Still, while partisanship is a major reason why some people hate the health law, it’s far from the only one. Here are four more: 

Ideology

Conservatives and libertarians strongly object to the federal government becoming ever more involved in the nation’s health care system. While the refrain that the ACA represented a “government takeover” of health care was a significant exaggeration, the law did insinuate the government significantly further in its funding and oversight of health care.

Adding to that was the unhappiness with the ACA’s individual mandate. Although the idea was originally suggested by Republicans in the late 1980s, the GOP had mostly backed away from it over the years (with the notable exception of Massachusetts Gov. Mitt Romney, who supported that state’s health overhaul in 2006).

But conservatives are not alone in opposing the ACA on ideological grounds. Many liberals don’t like the law, either. They think it does not go far enough toward a fully government-run system and gives too much power to private insurance companies. 

Lack Of Knowledge

A big part of why people don’t like the health law is that they don’t understand what it does or how it works. Some of that is because health care is complicated.

Even some of the main arguments made by the law’s supporters are not well understood. For example, the health law is responsible for some 20 million Americans gaining health insurance. Yet in 2016, when the uninsured rate hit an all-time low, only one-quarter of respondents to the Kaiser tracking poll knew that. A little under half thought the rate had remained unchanged, and 21 percent thought the rate had risen to an all-time high.

But some misperceptions follow intentional fabrications or exaggerations of the law’s impact. Many people came to believe (incorrectly) that the law would create “death panels” to decide the fate of seniors on Medicare, which became PolitiFact’s “Lie of the Year” in 2009. Other outlandish and untrue claims about the law included the idea that it would require people to be microchipped, that it would create a “private army” for President Barack Obama and that it would require hospitals to fire obese employees.

Even the derisive nickname “Obamacare” fed the confusion. In a now-famous skit by comedian Jimmy Kimmel, people on the street expressed a strong preference for the Affordable Care Act over Obamacare — unaware that they were the same thing. 

Confusing The Health Law With The Rest Of The Health System

Once the ACA became law, basically everything bad that happened in health care was attributed to it. This is the famous “you broke it, you bought it” problem — the law became the scapegoat for any number of problems in the health care system, regardless of whether they predated its enactment.

For example, rising prices for prescription drugs has been a problem for years. But the ACA did not seek to address that, except for one provision that sought to facilitate generic copies of some of the most expensive biologic medications.

Also, before the ACA, some insurers stopped offering plans in the individual market, while others raised premiums dramatically and often would not cover care at high-cost providers like teaching hospitals. 

Some People Actually Are Worse Off

The ACA did create some losers. Healthy people who managed to buy individual health insurance before the law’s passage have seen their premiums and out-of-pocket costs soar as insurers have raised prices to accommodate sicker people who had been largely shut out of coverage. Among those hardest hit are people who earn just slightly too much to qualify for federal premium subsidies, particularly early retirees and people in their 50s and early 60s who are self-employed.

Many of those people would have been helped if Democrats had been able to pass some of their original ideas for the ACA, including a “public option” plan run by the government, or a “Medicare buy-in” that would have given people age 55 and older the option of purchasing Medicare coverage before the normal eligibility age of 65. Both were rejected by more conservative Democrats in the Senate.

Some people found themselves in a “coverage gap” after the Supreme Court in 2012 ruled that the ACA requirement for states to expand Medicaid had to be optional. That meant people with incomes under the poverty line but still too high to qualify for Medicaid in their states have no affordable program available.

Others were forced to give up coverage that they liked, even if it did not offer many benefits, or were angry because their doctors and hospitals were no longer in their insurers’ networks. Obama’s promise that “if you like your health plan you can keep it” was PolitiFact’s “Lie of the Year” for 2013.

However, even some of those consumers have seen benefits from the law, although they might not realize it, like required rebates from insurers who charge too much for administrative costs.

But it is human nature for people who feel wronged to complain loudly, while people who are satisfied merely go on with their lives. In the end, that is why it seems so many more people hate Obamacare than actually do.

 

Beyond Showmanship And Spite: Toward A Health Care “Grand Bargain”

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https://www.healthaffairs.org/do/10.1377/hblog20171116.24714/full/

Is a deal on health care possible? Conventional wisdom says no. “Repeal and Replace” is dead, and Republicans have moved on. So have many Democrats, toward pursuit of a single-payer plan that’s going nowhere on Capitol Hill but energizes the party’s core. Last month, President Donald Trump said he’ll “dismantle” the Affordable Care Act (ACA) on his own—and backed this up with executive orders that risk the stability of the insurance exchanges.

Democrats are angry that Trump and congressional Republicans want to repeal the ACA and roll back its expansion of health insurance coverage. Republicans are angry that Democrats pushed “Obamacare” through Congress on a party-line basis, and they see the ACA as big government running amok. Both parties are positioning themselves for primaries, and neither shows much interest in the risky work of compromise.

We’re alarmed. One of us is a Cato Institute-friendly “free-market”eer who wrote a book arguing (tongue in cheek) that Medicare is the work of the Devil. The other helped to develop President Barack Obama’s 2008 campaign health plan and believes that failure to ensure everyone’s access to health care is an assault on human decency. But we’ve come together because we believe that failure to resolve the present impasse will have hugely destructive consequences for millions of Americans’ access to health care—and for our national confidence in our political system’s capacity to function.

Designing A Deal

President Trump has cut off cost-sharing reduction subsidies to insurers and issued a directive to allow coverage options less comprehensive than the ACA requires—measures that threaten to unravel the individual and small-group markets by incentivizing younger and healthier people to exit. Meanwhile, the uncertainty that besets federal funding under the ACA for Medicaid expansion poses huge fiscal risks for states, as does Congress’s failure, so far, to renew funding for the Children’s Health Insurance Program (CHIP). And over the longer term, soaring private and public spending on medical services that deliver doubtful value erodes US productivity and well-being.

We think a bipartisan “grand bargain” to stabilize the US health care system is feasible—if key decision makers can move beyond showmanship and spite. To this end, we outline a deal that: honors but balances the competing values at stake, steadies both market and public mechanisms of medical care financing, and puts the nation on a path toward sustainability in health spending.

Our grand bargain builds on federalism. Vastly different values, priorities, and interests stand in the way of nationwide health policy uniformity. Allowing states to sort out controversial matters within broader limits than the ACA now imposes would permit creative policy alternatives to unfold and encourage local buy-in. We needn’t and shouldn’t mandate definitive answers to bitterly contested questions that can be reasonably negotiated at the state or local level. Instead, we should open political and market pathways for the emergence of answers to these questions over time.

Moving to this long game will require all sides to pass on their pursuit of a quick political win. Doing so is the key to moving from cycles of backlash and volatility to a system that builds confidence and delivers high-quality, compassionate health care to all.

The Long Game: Seven Steps Toward a Compromise that Can Work And Endure

With these basic principles in mind, we propose the following seven steps:

Moving Beyond Maximalism—Medicaid Rollback And “Medicare for All”

Republicans should end their campaign to roll back the ACA’s Medicaid expansion, and Democrats should stand down on their quest for single payer. Both pursuits inspire true believers but will go nowhere on Capitol Hill for the imaginable future.

State Flexibility

Give states more flexibility to design their Medicaid programs and to govern their insurance exchanges. One approach would be to simply allow states complete flexibility to design their own coverage rules. Alternatively, we could give states more flexibility but ensure, via federal law, that Medicaid and plans sold on the exchanges provide affordable access to effective preventive, diagnostic, and therapeutic services. States could also be allowed but not required to offer a public option through their exchanges. Instead of an all-or-none answer to the public plan question, the nation would have a framework for market-driven, state-by-state resolution. Similarly, states should be allowed to decide whether to prohibit, permit, or require enrollment of Medicaid beneficiaries in private plans. Finally, when it comes to care that serves culturally contested purposes—including, but not limited to, gender reassignment or confirmation and late termination of pregnancies for nontherapeutic reasons—states should be given autonomy to go their own ways. More federalism will achieve greater stability than would temporary nationwide imposition of one or another approach by whichever party happens to hold the electoral upper hand.

Health Savings Accounts That Appeal To Everyone

An expanded role for tax-protected health savings should have bipartisan appeal. We propose that every lawful US resident be auto-enrolled in a health savings account (HSA), funded through a refundable tax credit, scaled to income and family size. People could opt out but would lose this credit if they did. Few would do so, enabling HSAs to become a means for pursuing both market discipline and social equity.

Repeal The Individual Mandate

Sacrilege, you’re surely thinking, if you’re a Democrat who’s spent seven-plus years defending the mandate, the ACA’s most disliked element. But the mandate isn’t needed to keep healthy people in community-rated risk pools—it’s the intensity of the incentives, whether framed as penalties or subsidies, that matters. Even the mandate’s most outspoken economist-defender, Jonathan Gruber, concedes that high-enough subsidies for the purchase of insurance can substitute for it.

Such subsidies could be supplied in conservative-friendly fashion by allowing all who buy coverage on the exchanges to put HSA funds (including the tax credit we urge) toward their premiums. Sign-up for coverage could also be made more user-friendly through auto-enrollment, subject to opt-out, in “silver” plans (for tax filers who aren’t otherwise covered and aren’t Medicaid eligible). A more robust approach might condition the refundable HSA tax credit on tax filers’ purchasing insurance (or not opting out of auto-enrollment).

Congressional Authorization Of Funding For Both The ACA’s Cost-Sharing Reductions And CHIP

There is bipartisan support for restoring the ACA’s cost-sharing reduction subsidies and extending CHIP. Although annual appropriations are the norm, Congress should guarantee funding for the cost-sharing reductions for a two-year period, with automatic renewal for an additional two years if per capita subsidies rise by no more than the Consumer Price Index (CPI) during the prior two years. By so doing, Congress can reaffirm its authority over appropriations while helping to stabilize markets for individual coverage. Likewise, Congress should renew CHIP’s funding for several years—we urge three as a compromise—to both stabilize state budgets and secure health care for the millions of children who depend on this program.

The “Long Game”—Reining In Medical Spending

A long-term effort to contain spending growth is essential for US fiscal stability and consumer well-being. The ACA created a framework for doing this. The Independent Payment Advisory Board (IPAB) can limit Medicare spending, subject to congressional veto, if growth exceeds target rates. And the 40 percent “Cadillac tax” on high-cost private health plans will cover a rising share of the private market as medical costs increase. Together, these policies have the potential to contain clinical spending by capping demand. But there’s bipartisan opposition to both. The IPAB, which hasn’t yet been established, and the Cadillac tax, now delayed until 2020, are fiercely opposed by stakeholders with lots to lose, and they’re at high risk of repeal.

A grand bargain should follow through on both of these strategies, plus add similar restraints on Medicaid spending and on the amounts spent to subsidize coverage through the exchanges. Most other nations employ global budgeting to control health spending. For reasons of federalism, public philosophy, and market structure, global budgeting isn’t an option for the US. But a coordinated scheme of restraint, based on the best available behavioral and economic modeling, could apply similar braking power to our entire health economy. There’s plenty of room for argument about design details (that is, should per capita growth targets be based on the CPI? The CPI plus 1 percent?) and methods of restraint (that is, the IPAB approach? Spending caps for public programs? The Cadillac tax versus caps on tax deductibility of insurance premiums?). Continued bipartisan evasion will only make the problem worse.

Pursuing Therapeutic Value

Much more must be done to use health care resources wisely as constraints tighten. Tying financial rewards closely to clinical value via paymentpractices, market exclusivity policies, and other incentives will be critical—and will require the clearing of legal and regulatory obstacles. Voluntary action must also play a role: The grand bargain we’ve sketched here creates myriad opportunities for providers, patients, and insurers to gain by insisting on value from a sector of the economy that too often fails to deliver it.

To be sure, politics could foil all efforts to forge compromise. But there is a way forward. Our proposals achieve much that is important to both the ACA’s fiercest critics and staunchest defenders. They work in concert to address the political and market crises that immediately threaten our health care system, while laying the foundation for a long-term approach to control medical spending’s unsustainable growth.

How Well Does Insurance Coverage Protect Consumers from Health Care Costs?

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http://www.commonwealthfund.org/publications/issue-briefs/2017/oct/insurance-coverage-consumers-health-care-costs

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Abstract

  • Issue: The United States has made historic progress on insurance coverage since the Affordable Care Act became law in 2010, with 20 million fewer people uninsured. However, we must also measure progress by assessing how well people who have insurance from all coverage sources are protected from high health care costs.
  • Goals: To estimate the number and share of U.S. insured adults who are “underinsured” or have out-of-pocket costs and deductibles that are high relative to their incomes.
  • Method: Analysis of the Commonwealth Fund Biennial Health Insurance Surveys, 2003–2016.
  • Findings: As of late 2016, 28 percent of U.S. adults ages 19 to 64 who were insured all year were underinsured — or an estimated 41 million people. This is more than double the rate in 2003 when the measure was first introduced in the survey, and is up significantly from 23 percent, or 31 million people, in 2014. Rates climbed across most coverage sources, and, among privately insured, were highest among people with individual market coverage, most of whom have plans through the marketplaces. Half (52%) of underinsured adults reported problems with medical bills or debt and more than two of five (45%) reported not getting needed care because of cost.

Background

The Affordable Care Act (ACA) has transformed the health insurance market, allowing Americans who lack job-based health benefits access to affordable health insurance options. The law’s coverage expansions and protections have reduced the number of uninsured adults by more than 20 million.

Congress intended for the ACA to do more than expand access to insurance; it aimed for the new coverage to allow people to get needed health care at an affordable cost. Accordingly, for marketplace plans, the law includes requirements toward that end: an essential health benefit package, cost-sharing reductions for lower- income families, and out-of-pocket cost limits.1For those covered by the law’s Medicaid expansion, there is little or no cost-sharing in most states.2

For people covered by employer-based insurance — which includes more than half of Americans under age 65, or more than 150 million people3 — plans were historically far more comprehensive and cost-protective than individual market coverage.4 However, over the past decade, premium cost pressures have led companies to share increasing amounts of health costs with workers, particularly in the form of higher deductibles.5 At the same time, income growth has been sluggish, leaving families increasingly pinched by health care costs.

In this issue brief, we focus on how well health insurance protects people from medical costs, using a measure of “underinsurance” from the Commonwealth Fund’s Biennial Health Insurance Survey to examine trends from 2003 to 2016. Adults in the survey are defined as underinsured if they had health insurance continuously for the preceding 12 months but still had out-of-pocket costs or deductibles that were high relative to their incomes (see Box). The survey was conducted between July 12 and November 20, 2016. We examined underinsured rates across all coverage sources, including private (employer and individual market) and public (Medicaid and Medicare). It is the first time in this survey series that we are able to estimate underinsurance in the ACA’s marketplace plans.

Who Is Underinsured?

In this analysis, we use a measure of underinsurance that takes into account an insured adult’s reported out-of-pocket costs over the course of a year, not including premiums, and his or her health plan deductible. The measure was first used in the Commonwealth Fund’s 2003 Biennial Health Insurance Survey. These actual expenditures and the potential risk of expenditures, as represented by the deductible, are then compared with household income. Specifically, a person who is insured all year is underinsured if:

  • out-of-pocket costs, excluding premiums, over the prior 12 months are equal to 10 percent or more of household income; or
  • out-of-pocket costs, excluding premiums, over the prior 12 months are equal to 5 percent or more of household income if income is under 200 percent of the federal poverty level ($23,760 for an individual and $48,600 for a family of four); or
  • deductible is 5 percent or more of household income.

The out-of-pocket cost component of the measure is only triggered if a person uses his or her plan. The deductible component provides an indicator of the financial protection the plan offers and the risk of incurring costs before a person gets health care. The definition does not include people who are at risk of incurring high costs because of other design elements, such as exclusion of certain covered benefits and copayments. It therefore provides a conservative measure of underinsurance in the United States.

Conclusion and Policy Implications

Since the passage of the Affordable Care Act in 2010, the nation has experienced gains in coverage, as well as improvements on key indicators of access and medical bill problems.15 These improvements reflect coverage gains — fewer people are exposed to the full cost of health care — as well as more comprehensive health plans with greater cost protection. This is especially true for low-income people covered by Medicaid and marketplace plans. But, as this analysis shows, the United States has not eliminated cost-related barriers to timely health care or protected people from medical debt. While these problems continue to be most apparent in the individual insurance market, they are increasing in the employer group market. Even public insurance programs like Medicare, which covers seniors and disabled people under age 65, leave many struggling to pay for health care.16

The latest Republican-led effort to repeal and replace the Affordable Care Act would have significantly increased the cost of health care for many Americans. After that effort failed in September, the Trump administration took two major actions in October, which could also have the effect of increasing costs. The first was an executive order to federal agencies to write new regulations that would allow the sale of insurance products that skirt the ACA’s consumer protections and cost-sharing standards.17 In the second action, the administration ended the federal payments for the ACA’s cost-sharing reductions.18 At the other end of the political spectrum, Senator Bernie Sanders has introduced legislation that would phase out the ACA and eliminate most cost-sharing in a Medicare-for-All framework. Seeking middle ground, Senators Lamar Alexander and Patty Murray held hearings on stabilizing the marketplaces in September, which included an appropriation for the cost-sharing reductions. To reduce the number of underinsured people in our health system, we also suggest the following policy options:

For people in individual market and marketplace plans

  • Increase the cost coverage of health plans. The law’s cost-sharing reductions (CSRs) increase the actuarial value (the percentage of medical costs covered on average by a health plan) of the marketplace’s silver level plans from 70 percent to as high as 94 percent for people with incomes under 250 percent of poverty ($30,150 for an individual and $61,500 for a family of four). The Commonwealth Fund has found that these reductions have been effective in lowering deductibles for those eligible to levels in employer plans.19 To counteract the administration’s executive order, Congress can immediately reinstate the cost-sharing reduction payments by making an appropriation. Since the Congressional Budget Office (CBO) has already assumed the cost of the CSRs in the federal budget baseline, the appropriation is a formality: it would not increase the federal deficit. To make health care more affordable for middle-class families, Congress could then consider extending the CSRs higher up the income distribution.
  • Increase the number of services excluded from the deductible. Most plans sold in the individual market nationwide exclude certain services from the deductible, such as primary care visits and certain prescriptions.20 In 2016, the U.S. Department of Health and Human Services (HHS) provided a standardized plan option for insurers that excluded eight services from the deductible at the silver and gold level. These include primary and specialty care visits, urgent care visits, mental health and substance-use disorder outpatient visits, and all prescription drugs. HHS or Congress could make these exceptions mandatory for all plans. Covered California, the California marketplace, requires all health plans sold in the marketplace to exclude all physician visits and outpatient services from the deductible.
  • Simplify the metal tiers and increase premium tax credits. As an alternative to extending cost-sharing reductions to people above 250 percent of poverty, Congress could lower the number of metal tiers in the individual market from four to two at higher actuarial values. For example, insurers could be required to sell just gold and platinum plans, which have actuarial values of 87 percent and 94 percent and much lower deductibles and copayments than silver and bronze plans. Tax credits would adjust to reflect the plans’ higher premium costs. This avoids the circuitous route of covering insurers’ costs through the cost-sharing reductions. Premium tax credits could be increased and extended to people earning more than 400 percent of poverty.21

For people in employer plans

  • Set a standard actuarial value for employer plans. Currently under the ACA, people in employer plans may become eligible for marketplace tax credits if the actuarial value of their plan is less than 60 percent. Congress could increase this level to 70 percent (the level of silver plans) or higher.
  • Set standards for deductible exclusions in employer plans. Most employer plans exclude at least some services from their deductibles.22 Congress could set a minimum set of exclusions that could resemble the current standard plan option for the marketplaces.

Addressing the Key Driver of Insurance Costs: Health Care Cost Growth

Health care costs are the single largest factor in the growth of private insurance premiums in the United States. Insurers and employers have tried to manage premium growth by making consumers increasingly responsible through higher deductibles and other cost-sharing vehicles. Advocates of this approach argue that with more skin in the game, consumers will help to slow cost growth by choosing more-efficient providers and being more selective in the services they use. But years of experience with high-deductible health plans in the U.S. has yielded scant evidence that such a strategy is effective. Instead, as the survey findings indicate, many consumers have responded to higher deductibles by avoiding needed health care and skipping their medications.

Innovations under way in the delivery system, some of which stem from the ACA, have helped slow the rate of growth in health care costs in the past few years. But moving the nation closer to the performance of other countries on both cost and health outcomes will require considerably more work.23 While targeted consumer cost-sharing may help to reduce use of low-value health services, this approach is unlikely to be successful unless consumers are better informed on prices and the value of alternative approaches to their health care problems. Such information is largely unavailable. Evidence suggests that consumers cannot do the heavy lifting required to reduce the rate of growth in medical costs in the United States.

 

Instead of health care for all, Assembly has a do-nothing committee

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http://www.sacbee.com/opinion/op-ed/soapbox/article179847606.html

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With the turmoil and chaos caused by the ceaseless efforts of Congress and the Trump administration to shred the Affordable Care Act, shouldn’t our legislators show more urgency to provide health security for Californians?

On Monday, an Assembly select committee will hold its first hearing “to determine the best and quickest path forward toward universal health care,” in the words of Assembly Speaker Anthony Rendon.

However, the committee has no authority to act on legislation. It is essentially a discussion group designed to give the appearance of moving forward on reform, rather than act on an existing bill, Senate Bill 562, which would guarantee health care for all Californians without huge out-of pocket costs hurting so many.

A legislative study has already concluded that a Medicare for all/single-payer approach, as SB 562 advances, is superior to all other models of health care financing.

Further, a study released in June documented the bill’s additional cost to the state budget is closer to $100 billion, not the misleading $400 billion cited by opponents. The study also offered financing proposals under which nearly all families and businesses would pay less for health care than they do now.

It is also troubling that select committee co-chairmen Jim Wood, a Healdsburg Democrat, and Joaquin Arambula, a Fresno Democrat, are the two of the three largest Assembly recipients of campaign contributions from the health care and insurance industries.

Unlike the powerless committee, SB 562 has the enormous advantage of having already passed the state Senate in June. The Assembly can take it up immediately early next year with any amendments members want to propose.

Further delays leave Californians at the mercy of the Trump administration. Consider the latest executive orders to encourage the sale of insurance plans that evade the extensive protections established by California legislators, and to cancel subsidy payments to insurers to sabotage the ACA marketplaces.

Premiums in California for “silver” plans, by far the most common under Covered California, are going up by 25 percent on average. Anthem Blue Cross rates are jumping by 37 percent, and it is pulling out of about half of California counties.

The specific impact on individuals and families varies depending on where you live, your income, how much coverage you want, and who your current insurer is. Or you may need to shop around for a non-silver plan – all with differing levels of coverage, deductibles and co-pays and that may or may not include your doctor, hospital, or other providers in its network.

Or Congress may or may not pass supplemental legislation to reverse Trump’s orders, which he may or may not support, with its own set of uncertain impacts. Everyone clear?

There’s a fix that would end Californians’ anxiety over their health coverage and cost, and establish protection for all. The people are ready. Earlier this month, nearly 1,000 activists attended 100 events in all 80 Assembly districts to talk to their neighbors about SB 562, and 10,000 people signed petitions urging its approval.

Concord resident Emily Chandler was among them. She told us she pays $800 a month for insurance but sometimes avoids going to the hospital because she can’t afford the co-pays and deductibles. She is one of 15 million Californians who, even under the ACA, are without coverage or who don’t get the care they need due to rising costs.

Californians don’t need a committee that can do little more than talk. They need real relief, SB 562.

Trump to Scrap Critical Health Care Subsidies, Hitting Obamacare Again

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 President Trump will scrap subsidies to health insurance companies that help pay out-of-pocket costs of low-income people, the White House said late Thursday. His plans were disclosed hours after the president ordered potentially sweeping changes in the nation’s insurance system, including sales of cheaper policies with fewer benefits and fewer protections for consumers.

The twin hits to the Affordable Care Act could unravel President Barack Obama’s signature domestic achievement, sending insurance premiums soaring and insurance companies fleeing from the health law’s online marketplaces. After Republicans failed to repeal the health law in Congress, Mr. Trump appears determined to dismantle it on his own.

Without the subsidies, insurance markets could quickly unravel. Insurers have said they will need much higher premiums and may pull out of the insurance exchanges created under the Affordable Care Act if the subsidies were cut off. Known as cost-sharing reduction payments, the subsidies were expected to total $9 billion in the coming year and nearly $100 billion in the coming decade.

“The government cannot lawfully make the cost-sharing reduction payments,” the White House said in a statement.

It concluded that “Congress needs to repeal and replace the disastrous Obamacare law and provide real relief to the American people.”

In a joint statement, the top Democrats in Congress, Senator Chuck Schumer of New York and Representative Nancy Pelosi of California, said Mr. Trump had “apparently decided to punish the American people for his inability to improve our health care system.”

“It is a spiteful act of vast, pointless sabotage leveled at working families and the middle class in every corner of America,” they said. “Make no mistake about it, Trump will try to blame the Affordable Care Act, but this will fall on his back and he will pay the price for it.”

Lawmakers from both parties have urged the president to continue the payments. Mr. Trump had raised the possibility of eliminating the subsidies at a White House meeting with Republican senators several months ago. At the time, one senator told him that the Republican Party would effectively “own health care” as a political issue if the president did so.

“Cutting health care subsidies will mean more uninsured in my district,” Representative Ileana Ros-Lehtinen, Republican of Florida, wrote on Twitter late Thursday. She added that Mr. Trump “promised more access, affordable coverage. This does opposite.”

But Speaker Paul D. Ryan, Republican of Wisconsin, praised Mr. Trump’s decision and said the Obama administration had usurped the authority of Congress by paying the subsidies. “Under our Constitution,” Mr. Ryan said, “the power of the purse belongs to Congress, not the executive branch.”

The future of the payments has been in doubt because of a lawsuit filed in 2014 by House Republicans, who said the Obama administration was paying the subsidies illegally. Judge Rosemary M. Collyer of the United States District Court in Washington agreed, finding that Congress had never appropriated money for the cost-sharing subsidies.

The Obama administration appealed the ruling. The Trump administration has continued the payments from month to month, even though Mr. Trump has made clear that he detests the payments and sees them as a bailout for insurance companies.

This summer, a group of states, including New York and California, was allowed to intervene in the court case over the subsidies. The New York attorney general, Eric T. Schneiderman, said on Thursday night that the coalition of states “stands ready to sue” if Mr. Trump cut off the subsidies.

What the administration has done to weaken the health law.

Mr. Trump’s decision to stop the subsidy payments puts pressure on Congress to provide money for them in a spending bill.

Senator Lamar Alexander, Republican of Tennessee and the chairman of the Senate health committee, and Senator Patty Murray of Washington, the senior Democrat on the panel, have been trying to work out a bipartisan deal that would continue the subsidy payments while making it easier for states to obtain waivers from some requirements of the Affordable Care Act. White House officials have sent mixed signals about whether Mr. Trump was open to such a deal.

The decision to end subsidies came on the heels of Mr. Trump’s executive order, which he signed earlier Thursday.

With an 1,100-word directive to federal agencies, the president laid the groundwork for an expanding array of health insurance products, mainly less comprehensive plans offered through associations of small employers and greater use of short-term medical coverage.

It was the first time since efforts to repeal the landmark health law collapsed in Congress that Mr. Trump has set forth his vision of how to remake the nation’s health care system using the powers of the executive branch. It immediately touched off a debate over whether the move would fatally destabilize the Affordable Care Act marketplaces or add welcome options to consumers complaining of high premiums and not enough choice.

Most of the changes will not occur until federal agencies write and adopt regulations implementing them. The process, which includes a period for public comments, could take months. That means the order will probably not affect insurance coverage next year, but could lead to major changes in 2019.

“With these actions,” Mr. Trump said at a White House ceremony, “we are moving toward lower costs and more options in the health care market, and taking crucial steps toward saving the American people from the nightmare of Obamacare.”

“This is going to be something that millions and millions of people will be signing up for,” the president predicted, “and they’re going to be very happy.”

But many patients, doctors, hospital executives and state insurance regulators were not so happy. They said the changes envisioned by Mr. Trump could raise costs for sick people, increase sales of bare-bones insurance and add uncertainty to wobbly health insurance markets.

Chris Hansen, the president of the lobbying arm of the American Cancer Society, said the order “could leave millions of cancer patients and survivors unable to access meaningful coverage.”

In a statement from six physician groups, including the American Academy of Family Physicians, the doctors predicted that “allowing insurers to sell narrow, low-cost health plans likely will cause significant economic harm to women and older, sicker Americans who stand to face higher-cost and fewer insurance options.”

While many health insurers remained silent about the executive order, some voiced concern that it could destabilize the market. The Trump proposal “would draw younger and healthier people away from the exchanges and drive additional plans out of the market,” warned Ceci Connolly, the chief executive of the Alliance of Community Health Plans.

Administration officials said they had not yet decided which federal and state rules would apply to the new products. Without changing the law, they said, they can rewrite federal regulations so that more health plans would be exempt from some of its requirements.

The Affordable Care Act has expanded private insurance to millions of people through the creation of marketplaces, also known as exchanges, where people can purchase plans, in many cases using government subsidies to offset the cost. It also required that plans offered on the exchanges include a specific set of benefits, including hospital care, maternity care and mental health services, and it prohibited insurers from denying coverage to people with pre-existing medical conditions.

The executive order’s quickest effect on the marketplaces would be the potential expansion of short-term plans, which are exempt from Affordable Care Act requirements. Many health policy experts worry that if large numbers of healthy people move into such plans, it would drive up premiums for those left in Affordable Care Act plans because the risk pool would have sicker people.

“If the short-term plans are able to siphon off the healthiest people, then the more highly regulated marketplaces may not be sustainable,” said Larry Levitt, a senior vice president for the Kaiser Family Foundation. “These plans follow no rules.”

Mr. Trump’s order would also eventually make it easier for small businesses to band together and buy insurance through entities known as association health plans, which could be created by business and professional groups. A White House official said these health plans “could potentially allow American employers to form groups across state lines” — a goal championed by Mr. Trump and many other Republicans — allowing more options and the formation of larger risk pools.

Association plans have a troubled history. Because the plans were not subject to state regulations that required insurers to have adequate financial resources, some became insolvent, leaving people with unpaid medical bills. Some insurers were accused of fraud, telling customers that the plans were more comprehensive than they were and leaving them uncovered when consumers became seriously ill.

The White House said that a broader interpretation of federal law — the Employee Retirement Income Security Act of 1974 — “could potentially allow employers in the same line of business anywhere in the country to join together to offer health care coverage to their employees.”

The order won applause from potential sponsors of association health plans, including the National Federation of Independent Business, the National Restaurant Association, the U.S. Chamber of Commerce and Associated Builders and Contractors, a trade group for the construction industry.

The White House released a document saying that some consumer protections would remain in place for association plans. “Employers participating in an association health plan cannot exclude any employee from joining the plan and cannot develop premiums based on health conditions” of individual employees, according to the document. But state officials pointed out that an association health plan can set different rates for different employers, so that a company with older, sicker workers might have to pay much more than a firm with young, healthy employees.

“Two employers in an association can be charged very different rates, based on the medical claims filed by their employees,” said Mike Kreidler, the state insurance commissioner in Washington.

Mr. Trump’s order followed the pattern of previous policy shifts that originated with similar directives to agencies to come up with new rules.

Within hours of his inauguration in January, he ordered federal agencies to find ways to waive or defer provisions of the Affordable Care Act that might burden consumers, insurers or health care providers. In May, he directed officials to help employers with religious objections to the federal mandate for insurance coverage of contraception.

Both of those orders were followed up with specific, substantive regulations that rolled back Mr. Obama’s policies.

In battles over the Affordable Care Act this year, Mr. Trump and Senate Republicans said they wanted to give state officials vast new power to regulate insurance because state officials were wiser than federal officials and better understood local needs. But under Thursday’s order, the federal government could pre-empt many state insurance rules, a prospect that alarms state insurance regulators.

Another part of Mr. Trump’s order indicates that he may wish to crack down on the consolidation of doctors, hospitals and other health care providers, a trend that critics say has driven up costs for consumers. Mr. Trump said that administration officials, working with the Federal Trade Commission, should report to him within 180 days on federal and state policies that limit competition and choice in the health care industry.

HERE’S HOW MUCH MONEY EVERY SENATOR RECEIVED FROM HEALTH-INSURANCE COMPANIES IN THE LAST ELECTION CYCLE

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https://psmag.com/news/health-insurance-senate-money-connections

Image result for HERE'S HOW MUCH MONEY EVERY SENATOR RECEIVED FROM HEALTH-INSURANCE COMPANIES IN THE LAST ELECTION CYCLE

On average, senators who don’t support Bernie Sanders’ single-payer plan received more money from insurance companies.

Senator Bernie Sanders introduced a radical bill last week that would overhaul America’s health-insurance system. The Medicare for All Act of 2017 would turn the American government into the country’s only payer—besides individuals—for health care. While the bill has virtually no chance of passing the Republican-controlled Congress, it’s still symbolically important because it shows the Democrats’ shift to the left on health care. Case in point: The last time Sanders (I-Vermont) introduced a similar bill, in 2013, he wasn’t able to garner a single co-sponsor; this time, 16 Democratic senators signed on as co-sponsors.

What’s driving this change of heart? According to University of Southern California political scientist Christian Grose, many of these co-signers are thought to have presidential ambitions and therefore may be “trying to peel off some support from Bernie Sanders voters were they to run in 2020,” he writes in an email. In addition, the number of Americans who say they want to have a single-payer health-care system is growing, although they remain in the minority.

Might other interests be at work as well? MapLight, a non-profit that tracks how campaign donations affect politicians’ voting, ran the numbers to see how much accident- and health-insurance companies have donated to sitting senators in their most recent election campaigns. Pacific Standard re-ran MapLight’s analysis using the organization’s “Find Contributions” tool and came up with similar results: On average, senators who didn’t sign Medicare for All received about $48,000 from these industries between November of 2010 and November of 2016. That’s nearly twice as much as the 17 senators who signed it, who received an average of $27,000. Democratic senators who didn’t sign on received an average of more than twice as much in donations as Sanders and his 16 co-signers: $56,500. You can see our full results below:

https://docs.google.com/spreadsheets/d/e/2PACX-1vTyQJO0lRZWnSGvBX6zIafVQOx8vuqXcn_0g0gwyTlevT48hp8uwPBFQ-JlMS_A3w3VsueFbGHPDSaX/pubhtml?widget=true&headers=false

Of course, these numbers don’t show the whole picture. It’s very difficult to track all the ways a company can donate to a political candidate. MapLight analysts sought to identify donations from companies, company employees, and relevant political action committees, but they may have missed some major contributions. “The money is more than likely grossly undercounted,” says Paul Jorgensen, a political scientist who studies campaign finance at the University of Texas–Rio Grande Valley and is not involved with MapLight. “What it may not account for are the other committees that those sitting senators will be a part of that receive cash. The committee system in Congress is very complicated and the flow of money is very complicated. Just looking at the primary campaign committee is not sufficient for looking at an aggregate of campaign donations.” Candidates may receive support from super political action committees, or super PACs, run by their party leadership, for example, which wouldn’t show up in the data MapLight uses, which is drawn from the Center for Responsive Politics.

It’s possible that the ratios we found—twice as much money given to Medicare for All’s non-supporters—might be different in a full accounting of donations. Still, nearly all of the political scientists Pacific Standard consulted thought it was reasonable to report these numbers as a rough estimate of industry money involved in the Senate’s votes on health care. They also said the ratios are plausible and, if correct, significant. (Jorgensen was the exception because he thought the undercount might be so severe.)

These numbers don’t prove that industry donations made senators not support Medicare for All. To argue that, analysts would have to rule out other reasons senators may not support the bill, such as their personal ideologies or the desires of their constituents. Plus, the line of reasoning may run the other way. “It’s just as likely that these senators were openly unfriendly to legislation such as the Sanders bill and that that is why the industry donated to them in the first place,” George Mason University political scientist Jennifer Nicoll Victor writes in an email. “The reason for the donation isn’t to ‘corrupt’ the senator or to buy their position on a bill, rather the donation is more like an expression of commonality, friendship, or alliance because they already agree with one another.”

There’s other evidence that shows money influences votes, at least for other bills. Jorgensen himself worked on a white paper for the Roosevelt Institute, a think tank that supports stricter regulation on business, that linked industry donations to congressional votes on the Dodd-Frank Act. MapLight’s analysis isn’t set up to make that same argument for Sanders’ Medicare for All Act. MapLight spokesman Alec Saslow admits as much, but adds, “At a minimum, the outsized influence of money in politics gives the public reasonable cause to question our lawmakers’ motivations.”

 

The Best Health Care System in the World: Which One Would You Pick?

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“Medicare for all,” or “single-payer,” is becoming a rallying cry for Democrats.

This is often accompanied by calls to match the health care coverage of “the rest of the world.” But this overlooks a crucial fact: The “rest of the world” is not all alike.

The commonality is universal coverage, but wealthy nations have taken varying approaches to it, some relying heavily on the government (as with single-payer); some relying more on private insurers; others in between.

Experts don’t agree on which is best; a lot depends on perspective. But we thought it would be fun to stage a small tournament.

We selected eight countries, representing a range of health care systems, and established a bracket by randomly assigning seeds.

To select the winner of each matchup, we gathered a small judging panel, which includes us:

  • Aaron Carroll, a health services researcher and professor of pediatrics at Indiana University School of Medicine
  • Austin Frakt, director of the Partnered Evidence-Based Policy Resource Center at the V.A. Boston Healthcare System; associate professor with Boston University’s School of Public Health; and adjunct associate professor with the Harvard T.H. Chan School of Public Health

and three economists and physician experts in health care systems:

  • Craig Garthwaite, a health economist with Northwestern University’s Kellogg School of Management
  • Uwe Reinhardt, a health economist with Princeton University’s Woodrow Wilson School of Public and International Affairs
  • Ashish Jha, a physician with the Harvard T.H. Chan School of Public Health and the director of the Harvard Global Health Institute

A summary of our worldviews on health care is at bottom.

So that you can play along at home and make your own picks, we’ll describe each system along with our choices (the experts’ selections will decide who advances). When we cite hard data, they come from the Commonwealth Fund’s International Country Comparison in 2017.

But enough talk. Let’s play.

Why Bernie Sanders’s plan for universal health care is only half right

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https://www.brookings.edu/blog/fixgov/2017/09/13/why-bernie-sanderss-plan-for-universal-health-care-is-only-half-right/?utm_campaign=Brookings%20Brief&utm_source=hs_email&utm_medium=email&utm_content=56298642

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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.