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How ‘Medicare for All’ went from pipe dream to mainstream

Universal health care debates could shape the 2020 election — and the future of the Democratic Party

Sen. Bernie Sanders may have been among the first to nudge Democrats toward universal health care, but he wasn’t the last. (Sarah Silbiger/CQ Roll Call file photo)
Sen. Bernie Sanders may have been among the first to nudge Democrats toward universal health care, but he wasn’t the last. (Sarah Silbiger/CQ Roll Call file photo)

Political candidates and activists in Maine, especially in rural areas, often got a sharp reaction five years ago when they knocked on doors to promote universal health care.

“The reaction was, ‘Oh, you’re a commie,’” said Phil Bailey, who back then advocated for various Democratic causes.

Now, voters in those same conservative areas have a different take.

“Of course” is a common response to calls for universal coverage, said Bailey, now executive director of Maine AllCare, part of a national coalition campaigning for single-payer health care. The organization saw enough growing momentum and received enough financial support to justify hiring Bailey and another full-time staffer last summer for the previously volunteer-led group.

Watch: What if we switch to a single-payer health care system?

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What was once seen as a long-shot pitch from Vermont independent Sen. Bernie Sanders during his 2016 presidential campaign is now a proposal that at least four of his Senate colleagues also vying for the party’s 2020 nomination supported during the last Congress. The issue is driving the national political health care debate.

But to succeed in enacting a single-payer system such as the “Medicare for All” plan that Sanders backs, liberals would need an unprecedented grassroots movement propelling the effort forward and would have to work out complicated policy details affecting nearly one-fifth of the nation’s economy.

Democrats are already contending with industry groups hoping to shift the focus back to strengthening the current system. Most drug companies, hospitals and insurers oppose Medicare for All, which undoubtedly complicates progressives’ efforts. The party’s left wing is pushing a bold, pricey plan carrying political risks that make Democratic leaders shudder. Despite all the inevitable political hurdles, getting a single-payer law enacted may look easy compared to implementing it.

The most ardent advocates for a government-run, single-payer system are not content with incremental steps. They are seeking a wholesale reorganization of the nation’s health care system.

The proposed two-year transition may be too fast for the entire industry to adapt to in an overhaul that experts warn would displace workers and jolt the economy.

“It is going to be a big administrative and logistical challenge. When you’re talking about moving everyone in the country into a new health insurance program, that is not a small feat,” said Linda Blumberg, an institute fellow at the Health Policy Center at the left-leaning Urban Institute.

Upending the industry

A single-payer health care plan would significantly change every sector of the health care industry. Hospitals and doctors would need to adjust to a new payment system, the insurance industry would shrink to a fraction of its size, and the government would bring drug companies to the negotiating table to determine prices.

The 2010 health care law left in place most of the existing health care infrastructure in the U.S. Still, experts warn that the lessons from that more incremental transition show how dramatic it would be to shift to a single-payer system.

Supporters aren’t intimidated by the seismic nature of the change. The hope is not just to ensure that everyone has coverage, but also to take on health care companies seeking to maximize their profits, said Adam Green, a co-founder of the Progressive Change Campaign Committee, a political action committee that supports liberal candidates.

“Medicare for All boils down to two things,” Green said. “One is universal coverage. The other is corporate accountability.”

Setting up a single-payer system would most likely require creating a new government program to serve as the payer and oversee the system. A House bill by the co-leader of the Progressive Caucus, Pramila Jayapal, would also establish a national health care budget to cap costs.

The Washington Democrat’s bill, like Sanders’ plan, doesn’t envision a large role for supplemental insurance.

It would be permitted, but aides say it would likely be unnecessary and used only to cover medically unnecessary treatments, such as cosmetic surgery. Unraveling the current insurance system is a Gordian knot-style task all its own.

Even public entitlement programs are often administered through private plans, with 68 percent of people in Medicaid and 34 percent of those in Medicare using comprehensive managed care plans.

Granddaddy of 2020 issues

The role of private insurance in a single-payer system has already emerged in the fledgling Democratic presidential primary race.

California Sen. Kamala Harris sparked the debate over the survival of private insurance earlier this year, saying she favors a single-payer system that would eliminate it. Harris has also backed other proposals, but called the single-payer plan her top choice.

Minnesota Sen. Amy Klobuchar said such a move is not feasible and supports a bill by Hawaii Democratic Sen. Brian Schatz to let people buy into Medicaid. Similarly, former Texas Rep. Beto O’Rourke, who previously supported a single-payer system, now says another path to universal coverage may be more efficient.

The single-payer bills introduced so far would not be based on the current Medicare program, but instead would greatly expand the program’s benefits.

Watch: Amy Klobuchar is running for president Here are some congressional basics

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Jayapal and Sanders both say the national health program would cover all medically necessary treatments. Those could be determined by a doctor or a newly formed national health program, said Jodi Liu, a RAND Corp. associate policy researcher.

Adam Gaffney, president of Physicians for a National Health Program, which supports a move to single-payer, said those decisions could resemble the way Medicare determines what care is medically necessary. He supports a national list of covered drugs.

Advocates for a single-payer system say that enrolling people in the program may be the easiest part. After all, decades ago, the government signed up seniors in the newly created Medicare program the year after it was enacted. Unenrolled patients could be signed up at a doctor’s office or hospital when they receive treatment, said Gaffney.

“Once you say you’re going to enroll everyone, it actually takes a lot of the administration out of it,” Gaffney said.

Compensation questions

One major challenge under a single-payer system would be how to pay medical providers. Advocates propose different types of plans, such as paying all providers at the same rate, possibly based on current Medicare rates, or global budgeting, through which institutions would regularly receive a lump sum of money as reimbursement for treatments.

Payment changes could benefit some doctors, such as those who currently treat many Medicaid enrollees and receive lower rates than Medicare. But providers who see mostly patients covered by commercial insurance could see payments fall.

The same goes for access to providers, said Liu. Since not all providers accept Medicaid, many patients would likely have an easier time finding doctors.

The government would face significant pressure to ensure that providers were compensated at the “right” rate, said Blumberg. Controlling health costs would be one goal, but the government would not want to skimp on quality or access to a sufficient number of providers.

In making decisions that affect the entire health care system, selecting the wrong payment rate could have serious ramifications, said Blumberg. “That process in and of itself is going to require a huge amount of attention and analysis and monitoring.”

Under the Jayapal bill, hospitals and the government would negotiate a budget based on factors like the historic volume of services over three years, a hospital’s normal expenditures and standard payment rates.

Hospitals would also get funding to cover their uncompensated care costs under an all-payer system.

Global lump-sum budgeting, which would give institutional providers an amount of money for health care services over a set amount of time, could contain costs, which advocates call a key benefit.

“If there was a national global budget, that’s certainly a direct lever to address how much spending there is on health care, but of course, there’s a lot of political issues that would come up,” such as budgetary pressures, Liu said.

While hospitals and other institutions would be paid quarterly through a capped budget under Jayapal’s proposal, individual doctors would be paid through a fee-for-service system for every procedure. The Health and Human Services secretary would have one year to set those providers’ fees. Hospitals are already sounding the alarm about receiving lower payments under Democratic proposals.

Whether Jayapal’s two-year transition is feasible is another question. A Jayapal aide said a fast transition provides less time for the industry to push back.

Still, Blumberg suggests a 10-year transition is more feasible. “The change for a lot of providers could be very substantial, and doing that in a very short period of time may have implications for disrupting the operation, the ability for these providers to continue to operate and the access for the patients,” she said.

Although the challenges are great, Medicare for All advocates note that other large developed countries ensure all citizens can access health care.

“Across industrialized countries, the hallmark of the health care system is universal coverage,” said Robin Osborn, a Commonwealth Fund vice president and director of international health policy and practice innovations.

Where’s the funding?

For all the questions around a single-payer system, the biggest question may be how to pay for it. Neither Jayapal or Sanders included a financing plan in their bills, although Sanders released a list of possible ways to pay for his.

The price tag for Sanders’ vision would be roughly $32 trillion over 10 years, according to two outside analyses of proposals Sanders put forward in 2016 and 2017, the first from the Urban Institute and the latter from the libertarian Mercatus Center.

That’s an eye-popping balance, although Sanders emphasizes findings that the U.S. would actually save money on health care spending over a decade. Single-payer advocates argue that the U.S. health care system is already the most expensive in the world and would be more efficient under a new program.

“When you think about the fact that people are already paying, you have to recognize that this is just a scare tactic, primarily from the right, saying you’re going to end up paying much more,” Jayapal said.

Still, asking taxpayers to pay the whole bill causes even some Democrats to balk.

Speaker Nancy Pelosi of California said in a recent Rolling Stone interview that a single-payer system may be easier administratively than other ways to reach universal coverage, but questioned how to pay for it.

Pelosi insists that Democrats should build on the 2010 health care law, which she helped shepherd through Congress a decade ago. Expanding the current Medicare program would not be as beneficial to Americans as that law, she argues.

“All I want is the goal of every American having access to health care,” she told the magazine. “You don’t get there by dismantling the Affordable Care Act.”

Critics will likely highlight the lack of a financing plan — and the expected high tax increase — that would come with implementing a system that covers essentially all medical expenses.

Sanders’ financing options include ending tax breaks that would become obsolete under a single-payer plan, adding a 4 percent income-based premium paid by households, imposing a wealth tax or a more progressive personal income tax, or leveraging fees on corporations, such as a one-time tax on offshore profits.

Other possibilities include sunsetting parts of the Republican 2017 tax overhaul or creating a tax on employers, which could mean that employers would not see much savings from not providing coverage to workers.

High-income earners are particularly at risk, said Larry Levitt, senior vice president for health reform at the Kaiser Family Foundation. “Depending on how it’s financed, high-income people could end up paying much more in taxes than they now pay for health care,” he said.

Because a transition to a single-payer plan would effectively eliminate most of the insurance industry, possibly 1 million to 2 million people who work in that industry would be displaced, according to Jayapal. Both Jayapal and Sanders proposed assistance for those workers with new job training, education or other programs.

Jayapal’s bill introduction in February led health insurance stocks to slip, although analysts did not express much concern. Spencer Perlman, director of health care research at Veda Partners, wrote to clients that he did not believe the bill to be a risk to managed care.

“The only conceivable analogues for the approach envisioned by House Progressives are the Medicare Act of 1965 and the ACA, each of which were generational policies that nevertheless largely left intact the commercial insurance paradigm and private control of healthcare services,” he wrote. That could be partially because a Medicare for All debate would draw in essentially every sector of the economy.

“It’s hard to imagine a bigger and more all-encompassing debate than over Medicare for All,” Levitt said. “Health care is such a big part of the economy, and you would just have every business and health care group weighing in.”

Political calculus

Some Democrats doubt that a Democratic president and Congress would implement a single-payer system.

Bob Kocher, a partner at Venrock and former senior Obama administration health care official, said actions in office typically don’t match the aspirations candidates invoke while campaigning.

“When you try to do it, the details matter and are hard and are often less disruptive and ambitious than what your poetry was,” he said.

Liberals insist that a single-payer system is the only path forward. “This is not a messaging event. We are going to get health care for every American,” Rep. Debbie Dingell, a Michigan Democrat, said at an event for the House bill.

If lawmakers were going to march toward a single-payer system, a massive shift in public opinion over a relatively short period of time would be needed.

Recent polls show that support for Medicare for All falls when people learn it would eliminate private insurance companies or raise taxes.

Whether Democrats decide to take up a single-payer plan would depend on how much a president campaigned on it, said Green.

A political boost could come if Medicare for All brought down “an old timer” who doesn’t support the policy, such as Ways and Means Chairman Richard E. Neal of Massachusetts, Green suggested.

“Now what we’re experiencing is there’s a lot of candidates who campaigned and won on Medicare for All, including flipping red seats blue, but ironically, there’s others who didn’t campaign on Medicare for All, got attacked anyway and won, but were kind of spooked from the whole experience,” Green said.

Still, Green added that if a “true progressive” wins the White House, he expects Medicare for All to be a priority.

Advocates hope that Medicare for All hearings in the coming months in the Rules and Budget committees will help the public understand the plan. Those hearings could also be a chance for single-payer opponents to raise concerns.

“Democrats are once again proposing fiscally irresponsible policies that will radically alter how hundreds of millions get their health care,” Rep. Steve Womack of Arkansas, the Budget Committee ranking Republican, said when Jayapal’s bill was released.

Mark Peterson, a political science professor at the University of California at Los Angeles, said historically, Americans have consistently said the health care system needs improvements, but they’re also afraid of what they don’t know.

“To the extent that what progressives are doing will stimulate that kind of action at the public level to really create that wave, a groundswell of support the way Social Security had, that can make an enormous political difference,” he said.

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