With the first presidential primary contest coming up in Iowa next week, there is no doubt that Vermont Sen. Bernie Sanders' proposal for a single-payer national health insurance program has won him substantial support from many liberals in his battle with Hillary Clinton for the Democratic nomination.
Sanders recently released a general outline of his “Medicare for All” plan (PDF). Liberal policy analyst Ezra Klein of news website Vox promptly called it “vague or unrealistic” on most issues. Now the question is whether Democrats want to get into the weeds on why his plan is or isn't viable—or simply vote with their hearts for their single-payer ideal.
My conversations with liberal friends during a vacation trip to Florida last week, as well as interviews with Democratic voters in Iowa earlier this month, made it clear how much many Democrats hunger to see the Affordable Care Act replaced by a single-payer plan. A recent Kaiser Family Foundation poll found that 81% of Democrats favor a Medicare-for-all approach.
When I pointed out that passing single-payer legislation would be impossible if the Republicans hold control of at least the House in the November elections—which they are almost certain to do—my friends' enthusiasm for Sanders' single-payer plan remained undiminished.
“I'd rather vote for someone who wants to do the right thing and lead us toward single payer, even if he can't get it done immediately,” one replied.
Clinton, who favors improving the ACA through measures to reduce consumers' out-of-pocket medical and prescription-drug costs, had chided Sanders for not releasing details of his single-payer plan. So just prior to their debate on Jan. 17, the independent senator released a six-page, $1.38 trillion per year “Medicare for all” plan description (PDF).
Sanders' plan would establish a federally administered, public insurance system that would cover the entire continuum of care, including dental and long-term care. Patients could choose any provider. There would be no premiums, deductibles, or copays. Sanders claims the plan would cost $6 trillion less than the current system over 10 years through reforming healthcare delivery and simplifying the payment structure.
The plan would be financed by a 6.2% income-based “premium” paid by employers, a 2.2% income-based premium paid by households, and higher income-tax rates on households with incomes above $250,000 a year, topping out at a 52% marginal rate for incomes over $10 million. Capital gains would be taxed at a much higher rate, tax deductions for wealthy people would be limited, and the estate tax would be hiked on individuals who inherit more than $3.5 million.
“Patients ... will be able to get the care they need without having to read any fine print or trying to figure out how they can afford the out-of-pocket costs,” according to Sanders' proposal. “Bernie's plan means no more copays, no more deductibles, and no more fighting with insurance companies when they fail to pay for charges.”
But Vox's Klein pointed out numerous problems and gaps in Sanders' proposal. First of all, his analysis found that Sanders counts on huge, unspecified cost savings, while at the same time offering much more generous benefits than Medicare or private insurance. “That's tremendously aggressive cost containment, even after you take the administrative savings into account,” Larry Levitt, senior vice president at the Kaiser Family Foundation, told Klein.
Sanders also doesn't mention that national health insurance systems in Canada, Great Britain, France, Germany, Australia, Taiwan and other countries engage in tough price negotiations with providers, drugmakers, device manufacturers, and other suppliers. U.S. healthcare industry players are certain to fight ferociously against government monopsony pricing.
It's true that a single-payer system likely would mean large savings in administrative costs, perhaps as much as 10% of the nation's $3 trillion annual healthcare bill, Gerard Anderson, a health policy professor at Johns Hopkins University, told NPR. But those are one-time savings. Where are the future savings?
Sanders' statement about “no more fighting with insurance companies” belies the reality that national health insurance systems often refuse to cover services and products that they deem unnecessary, unproven, or too expensive. That means they sometimes have to say no to patients and providers. Opponents of national health insurance call it rationing, and there's no more inflammatory political issue in health policy than the “R word.” Under SandersCare, “Who decides, how do they decide, what gets covered and what doesn't?” Klein asked.
In addition, if rates to providers are set at Medicare levels, what would Sanders do to prevent lots of hospitals from closing?
Would he allow supplemental private insurance, and, if so, how would he prevent the system from devolving into sharply different tiers of care for richer and poorer Americans?
Klein previously criticized Clinton's attack on Sanders' single-payer plan because she didn't honestly address the real political and policy problems with the plan, particularly that it would disrupt the coverage of virtually everyone in the country. “That much disruption is impossible to pass through the American political system,” he wrote.
But in terms of policy substance, Klein is tougher on Sanders. The Vermont senator “promises his plan will cover everything, while costing the average family almost nothing,” Klein wrote. “”This is what Republicans fear liberals truly believe: that they can deliver expansive, unlimited benefits to the vast majority of Americans by stacking increasingly implausible, and economically harmful, taxes on the rich. Sanders is proving them right.”
As healthcare industry veterans know, health policy is full of excruciating tradeoffs involving cost, quality and access. It may be asking a lot from voters to dive into some of these complexities before casting a ballot or participating in a caucus. But Democratic as well as Republican voters should recognize that the consequences of their election choices this year could be momentous for the American healthcare system.
