Tuesday, February 05, 2019

What to expect when Democrats are weighing single payer

Last week, Kamala Harris was asked about her support for single payer healthcare and responded, with respect to employer-sponsored insurance, "let's eliminate all that. Let's move on." Then Cory Booker was asked an imprecisely worded question  -- would he "do away with private health care" --  and gave an equally imprecise answer (no..) that left ambiguous whether health care or health insurance was under discussion. Ever since, warnings have been percolating on healthcare Twitter against framing single payer as all-or-nothing -- no more private insurance, or no Medicare for all.

Now cometh Sarah Kliff to inject some nuance. One point: "even countries we think of as single-payer still have some level of employer-provided health insurance." In Canada, everyone has "Medicare" -- fairly comprehensive insurance in which government (provincial and federal) does pay the providers. But most people also have employer-provided supplemental insurance to cover prescription drugs, dental, vision, and/or other services not covered by Canadian Medicare.

Another point: whether a transition away from private primary insurance in the U.S. is successful depends mainly on what people are asked to transition to:
Transitioning half of all Americans from one type of health insurance to another is no-doubt a huge undertaking. But whether or not it’s successful, I think, rests on what kind of coverage is on the other end. If it’s a government plan where Americans feel like they can afford to go to the doctor, then I’d expect any frustration with the transition to eventually dissipate. If it’s a government plan where co-payments and deductibles are high — especially if they’re higher than employer-sponsored coverage — then frustrations would almost certainly only grow over time.
Quite so. But I'd like to add some nuance to the nuance, on a couple of fronts.

1. ESI lucky-duckies. While surveys indicate that most of the 156-odd million Americans who are insured through their employers (or family members' employers) are satisfied with their coverage, the insurance they get varies widely. On average, employer-sponsored insurance (ESI) has an actuarial value a bit north of 80%, meaning the insurance is designed to cover  80-plus percent of the average enrollee's costs (that measure is somewhat misleading, as the most expensive enrollees skew the average).

That's roughly comparable to Medicare as we know it, or Medicare Advantage. But as David Anderson recently pointed out to me, a substantial minority gets more much robust coverage -- say, 95% actuarial value -- sometimes with virtually unlimited choice of providers. That lucky subgroup includes union members, but also some very powerful and loss averse people  -- say, investment bankers, lawyers, Harvard professors, professionals and high-paid executives generally. Kliff recalls the rage of those pre-ACA individual market enrollees who saw their premiums and deductibles spike when they were forced to transition to ACA-compliant plans. There were perhaps 3-5 million of them. There are probably significantly more people in top-drawer employer-sponsored coverage. Transitioning them to pretty good insurance would ignite a firestorm.

Plans and proposals for single-state single payer systems have foundered or never got near passage in Vermont, Colorado, California and New York. They have foundered mainly on cost and the required taxes. I always wondered why these plans include virtually no out-of-pocket expense for enrollees -- which makes them unrealistically expensive. The answer may be that the ESI lucky duckies must be placated.

2. A Goldilocks fallback? A U.S. transition of private insurance to a supplemental role presupposes a major all-at-once transformation to single payer for primary insurance. But a less wrenching transition (which may or may not prove total) is on the table, and I suspect that Democrats will converge on it (my evidence: it makes intuitive sense to me). That's to create a robust public health plan tied to Medicare (paying Medicare rates, requiring Medicare providers to accept it) --  and allow employers and employees to buy into it, either in phases or from the beginning. That's what the Medicare for America Act, introduced last December by Reps Rosa DeLauro (CT-03) and  Jan Schakowsky (IL-09), does (Charles Gaba has a rundown here). It's basically a translation into legislative form of the  Medicare Extra plan introduced last year by the Center for American Progress.

These plans are an update of the earliest iterations of the so-called public option with private alternatives that devolved into the ACA. The public option was originally conceived as a Medicare-like plan offered first and foremost to those who lacked access to other insurance, i.e. the ACA target population.  Plans of this sort include Helen Halpin's CHOICE program (2003), Rep. Peter Stark's Americare plan (2006), and Jacob Hacker's Health Care for America plan (2007), all of which allowed employers to buy in to the public plan via a payroll tax.  Some versions envisioned employer-sponsored insurance dying rather rapidly on the vine; others foresaw permanent competition between ESI and the public plan; and others left the question open.

And open it is, and should be. Politicians who respond to the single-payer question as Elizabeth Warren recently did are not "sidestepping," as the New York Times recently characterized Warren's response:
Twice, though, she ignored a question posed to her: Would she support eliminating private health insurance in favor of a single-payer system?

“Affordable health care for every American” is her goal, Ms. Warren said on Bloomberg Television, and there are “different ways we can get there.”
Early in the last election cycle, Tom Malinowski, who won a seat in New Jersey's 7th District, was more precise about the rationale for not mapping out the whole path in advance (I keep citing this because I think it's so well formulated):
On healthcare, Malinowski said he “does not support Medicare for all, but the idea of a Medicare option for all is worth exploring.” He said he’s spoken to many people who appreciate having healthcare options and he “would not force anyone to give up private health insurance which many Americans are happy with,” though he added that expanding a Medicare option could eventually lead to a single-payer type of system if people chose it voluntarily. 
Malinowski, by the way, is an unusually deep thinker among Congressional reps, and short on bullshit. Keep an eye on him.

Update, 2/6: the next post looks at coverage in the most generous employer-sponsored plans -- held by perhaps 15-25% of those insured through an employer.

1 comment:

  1. Good points as always, but I do want to make one very small clarification.

    The unrest at Harvard occurred because the health plans introduced higher deductibles and co-pays. This was a typical employer response to rising health care costs.

    The Harvard plans were totally compliant with the ACA all the time.

    Now what happened in Vermont was that high paid employees were facing an income tax of up to 9.5% as their new 'premium.'