Elizabeth Warren's healthcare two-step

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I owe a debt of gratitude to a Jacobin writer, Tim Higginbotham, who lambastes Elizabeth Warren for a) going into what he regards as unproductive detail about the financing of Medicare for All and b) signaling that she doesn't intend to enact M4A any time soon.

It's the latter that interests me. It solves something of a riddle. And unlike Higginbotham, I approve of this message. I think there may be a kind of deep realism in it, not severable from real commitment to major structural change.

Higginbotham notes that Warren's pay-fors depend in part on enacting other major legislation, and that her language accordingly projects Medicare for All into an..eventuality:

Warren’s remaining financing methods bring us to the biggest problem with her plan: its clear lack of urgency. Warren argues that her plan for comprehensive immigration reform could free up $400 billion toward Medicare for All over ten years, while cutting the dangerous military slush fund will free up another $798 billion.

On their own these are important goals, but using major political fights like these to cobble together funding for Medicare for All is a fairly good tell that Warren’s plan is not designed to be implemented anytime soon. This is further evidenced by the language in Warren’s Medium post about her plan: she describes Medicare for All as a “long-term” goal seven times, while couching the rest of the post in similar language (such as saying she wants to move to a Medicare for All system “eventually”).

That's absolutely right. And in fact, near the end of her Medium piece introducing her M4A funding plan, Warren makes it explicit that she won't be fighting to enact BernieCare from day 1, 2021:

Of course, moving to this kind of system will not be easy and will not happen overnight. This is why every serious proposal for Medicare for All contemplates a significant transition period.

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.

Medicare for all (who want or need it): A path for presidential candidates

As working assumptions tend crystalize (or harden) unnoticed, I've long assumed that the U.S. can't achieve or even mandate Medicare for All in one leap. The tax hikes are too much for Americans to tolerate, as is transformation by fiat of enormous (and enormously profitable) industries.

Since at least the early aughts, various plans have mapped out Medicare expansion by degrees. In its early iterations, the 'public option' was essentially a Medicare extension offered to people who lacked access to other insurance -- with a buy-in option for employers and/or employees. 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.

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. Current iterations include Jeff Merkley and Chris Murphy's Choose Medicare Act, Tim Kaine and Michael Bennett's Medicare X Choice Act (buy-in for small biz only)  and the Center for American Progress's Medicare Extra [update, 1/22: the Medicare for America Act, introduced last December by Reps Rosa DeLauro (CT-03) and  Jan Schakowsky (IL-09), is a close cousin of Medicare Extra. Charles Gaba has a rundown here.]

David Anderson recently outlined the intense challenge Democrats will face, should they gain the presidency and both houses of Congress (with a presumably razor thin Senate majority at best), in prioritizing among a huge list of agenda items demanding Senate floor time in particular (and that's assuming not only that Dems win a trifecta but that all energy isn't absorbed by some megacrisis).  I would add that if an incoming Democratic president chooses not to make healthcare reform priority number 1, patching the ACA would serve as a kind of placeholder. Such patches might start with capping individual market premiums as a percentage of income for all comers and, with varying degrees of cost and complexity, enriching and redesigning the subsidy structure.

What if the newly elected president has run on some kind of commitment to Medicare for all? I suspect the eventual winner (if a Democrat) is likely to hedge, as many Congressional candidates did, and advocate a path to Medicare for all, as the plans outlined above do.

Medicare expansion: An elastic idea for Democrats

Politico's Jennifer Haberkorn reports that Democratic candidates are avoiding the term "single payer" when staking out their healthcare positions. That's not only because Republicans use the term as a bogey signaling socialized medicine and socialism generally (they did the same with the much more conservative ACA).  More substantively:

Early last year, the DCCC shared verbal guidance with candidates and political consultants about the liabilities of supporting single payer, including polls that showed support for the idea declined once voters heard that it would likely come with significant tax increases and the potential loss of private health coverage many Americans have today, according to sources who saw the guidance.

Instead, Democrats are being urged to embrace the term "Medicare for All" -- which, taken literally, is single payer. Some candidates speak more cautiously of "a path to Medicare for all," however -- a term that's justifiably ambiguous. Any path to universal coverage in the U.S. is likely to be long, and include several stages and potential branchings -- including toward a system in which a public program is available to all, but some choose other options. A number of Democratic bills and proposals reflect this reality. In recent years, many forms of Medicare expansion have been proposed. They include the following, ranked from the most limited to the most expansive.

How Democratic candidates should talk about healthcare

The moderate/establishment candidate for the Democratic nomination in New Jersey's 7th Congressional District (a seat very much in play), Tom Malinowski, takes what in my view is an admirably substantive, focused, big-picture healthcare position:

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.

This more or less describes the Center for American Progress's Medicare Extra proposal and the Merkley-Murphy Choose Medicare Act. Those proposals in turn hark back to early versions of the public option, in which a Medicare-ish program was an 800-pound gorilla that private insurance was privileged to compete against if insurers or employers so chose. Some versions envisioned permanent competition between commercial/employer insurance and a public plan, while others expected a phase-out of private insurance (I discussed some of the variations here.)

Either way, my own view is that a public plan that employers and individuals can buy into provides a viable path either to a de facto all-payer system, in which commercial insurers pretty much have to pay similar rates to the public plan to survive, or to single payer.  And merits aside, I think Malinowski does a nice job in short space capturing both the conservative and the transformative appeal of a strong public option set alongside employer-based insurance. It's too bad that Democrats backed away from this model.

Could Trump's ACA sabotage pave the way to a strong public option?

The Urban Institute's Linda Blumberg and John Holahan, authors of an "ACA 2.0" blueprint, mull healthcare reform after Trump

In August 2015, Urban Institute scholars Linda Blumberg and John Holahan warned that the ACA marketplace as then constituted would probably never perform to expectations. Subsidies were insufficient to draw the robust participation the law's creators had anticipated. They proposed a revamped subsidy schedule that reduced premiums and out-of-pocket costs at every income level. For those with incomes above the current subsidy threshold of 400% of the Federal Poverty Level, premiums for a benchmark plan covering 80% of the average enrollee's costs would be capped at 8.5%.

Hillary Clinton more or less incorporated the Blumberg-Holahan proposal into her healthcare platform. And now, two years later, bills to improve the ACA introduced by Democrats in the House and Senate do likewise. Both bills precisely reproduce the plan's enhanced premium subsidies and offer even more generous reductions in enrollees' cost sharing (see the Appendix below for a summary).

The Senate bill, introduced by Elizabeth Warren and four colleagues,* places several new constraints on insurers in the individual market. These include requiring insurers to provide a better selection of doctors and hospitals, raising the percentage of premium revenue insurers are required to spend on enrollees' medical costs, and standardizing plan design. The preamble to a one-page summary of the bill appears to blame insurers alone for Americans' high healthcare costs.  By generously subsidizing enrollees at all income levels, however, the bill creates conditions under which insurers in the individual market can thrive.

ACA 2.0 -- or a whole new system?

I spoke to Blumberg and Holahan last week to get their reaction to the "ACA 2.0" bills, the Warren bill in particular. Blumberg confirmed that they had been consulted by the bill's creators, though they did not participate in the drafting.

Hey Senator Warren, Medicare Extra fills your prescription

Last month, at the Health Access 2018 conference, Elizabeth Warren decried rising out-of-pocket costs required in employer-sponsored health plans and demanded that a new round of healthcare reform "require private insurers to be just as affordable as public insurers like Medicare and Medicaid.”  (I discussed the speech at some length here.)

That formulation struck me as problematic in several ways: 1) Medicaid and Medicare offer very different levels of affordability (except where they're merged for dual eligibles); 2) employer-sponsored insurance, on average, is "just as affordable" as Medicare and in fact provides better protection against crushing out-of-pocket costs than traditional Medicare; and 3) Warren bashed insurers alone for price-gouging without mentioning provider payment rates, which would have to be squashed down if commercial insurance were subject to stricter affordability mandates.

Perhaps, though, Warren had some inkling of the Medicare-for-all-who-need-or-want-it plan that was brewing at the Center for American Progress, released yesterday.

Medicare Extra creates an all-payer system -- via a bank shot for employers

Like many "Medicare for All" or "Medicare for Most" plans that preceded it, the Center for American Progress's Medicare Extra plan, released on Feb. 22, preserves employer-sponsored insurance. Employers can opt to continue to offer their own plans, with a minimum actuarial value of 80% (near the current employer average). They can sponsor their employees' entry into Medicare Extra. Or they can leave their employees to enter the system on their own and reimburse the government.

The plan spells out two reasons for maintaining employer-sponsored insurance: keep employer dollars in the system, and minimize disruption (if you and your employer like your plan, you can keep it):

U.S. employers currently provide coverage to 152 million Americans and contribute $485 billion toward premiums each year. Surveys indicate that the majority of employees are satisfied with their employer coverage. Medicare Extra would account for this satisfaction and preserve employer financing so that the federal government does not unnecessarily absorb this enormous cost.

Timothy Jost and Harold Pollack weigh in on Medicare Extra

Yesterday, the Center for American Progress released a sweeping but incremental proposal to vastly expand Medicare and transition the U.S. to a more or less "all-payer" system, in which whatever private insurance remains (in employer plans, and Medicare Advantage-like plans) pays more or less the same rates and offers more or less the same benefits as a revamped Medicare, dubbed Medicare Extra. Medicaid and CHIP would also be folded in. Everyone would be covered.

It's a well designed proposal that's hard for a progressive not to like on the merits. But could Democrats ever pass anything like this? I asked Timothy Jost and Harold Pollack and got surprisingly different answers (I'll say that Pollack surprised me more than Jost). The article, with extensive input from both, is up at healthinsurance.org

POSTSCRIPT, 2/24: One thing is nagging me a bit as reaction to the article unfolds. Harold Pollack suggests that  "Democrats will be much more ruthless the next time around" -- they're done trying to placate not only Republicans but, to a certain extent, healthcare industry interests; they're virtually forced to go for broke if they get the chance. That strikes a deep chord with progressives; it breaks something loose in a progressive heart. Timothy Jost, on the other hand, throws cold water, ticking off the forces that will be aligned against a strong drive toward universal coverage and cost control. What fun is that? But Jost and Pollack's reactions are not as far apart as they appear. Jost does point out that if Democrats gain power any time soon they'll be under strong pressure from the activists a party depends on to go big. And Pollack, in comments that did not make it into the text (my bad?), said that he thinks there's a good chance Trump will be re-elected -- and also acknowledged that industry would hack some parts off before anything like this would ever get enacted.

Pollack's take on the politics the Medicare Extra plan surprised me. I thought he'd be as dubious about the prospects for success as Jost. The fact that he wasn't gives this article its charge, I think (along with the workable architecture of the Medicare Extra plan itself). But I'm also pretty sure that Pollack would be the first to acknowledge that Jost may well be right -- that our political system will prove incapable of putting through such sweeping and coherent reform.