Employer-sponsored insurance is deteriorating. What about fixing it rather than replacing it?

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Medicare for All's main political liability, as the presidential campaign has made clear, is loss aversion: most Americans are insured,  most are reasonably satisfied with their coverage, and a significant minority consider their top-drawer coverage a major asset. Americans also have ample cause to doubt their government's capacity to completely remake the country's healthcare system and serve as the sole source of major medical insurance to everybody.

At the same time, Medicare for All speaks to a current reality: employer-sponsored insurance (ESI), which covers the majority of Americans under age 65, is deteriorating, and Americans know it.  Kaiser Family Foundation tracking poll results released last week neatly capture the core household worries related to healthcare:

About two-thirds of Americans say they are either “very worried” (35%) or “somewhat worried” (30%) about being able to afford unexpected medical bills. This is larger than the share that say they are worried about affording a variety of expenses, including other types of health care costs as well as other household expenses. About half of insured adults say they worry about being able to afford their health insurance deductible (49%) and four in ten (40%) worry about being able to afford their premiums. More than four in ten adults overall worry about affording prescription drug costs (45%).

The Cadillac Tax: An idea whose time never came

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To the surprise of no one, it looks like the ACA's long-postponed Cadillac ax, an excise tax on employer-sponsored health plans that exceed a certain cost threshold,  is slated for legislative execution, along with the medical device tax.

Against the vociferous opposition of unions and employers, Obama fought to preserve the Cadillac Tax, a linchpin of the ACA's efforts to control healthcare costs. CBO estimates that repeal will cost the treasury $200 billion over ten years.

On one level, it's sad that Congress can't make taxes with powerful opponents stick. Medical device tax repeal is a dead giveaway.  But the Cadillac Tax was based on two false premises.

Employer-sponsored insurance as we know it is unsustainable. Now what?

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Kaiser's 2019 Employer Health Benefits Survey, released yesterday, highlights a basic I noted a month ago (based on a Kaiser precursor report): employer-sponsored health insurance is deteriorating. Average family plan premiums have topped $20,000; average deductibles have topped $1,600. Family premiums have increased 54% over ten years. That's actually down from the previous ten years, when rates more than doubled. But the climb in excess of inflation has been relentless.

The system most consistently fails low income workers -- many of whom would be better off if the employer offered no insurance, rendering them eligible for ACA marketplace subsidies. KFF president Drew Altman lays out the basics:

• Roughly 36 million American workers earn $25,000 per year or less — retail workers, personal care attendants, warehouse workers and many more.
• Just 33% of workers at lower-wage firms offering health benefits are covered by their employer’s health benefits, well below the 63% share at other firms offering coverage.
• These low-wage workers pay an average of $7,000 per year just toward the premium for a family plan.
• Workers in low-wage firms also face much higher deductibles: a $2,679 annual single deductible, while at other firms, the average is $1,610.

My takeaways:

David Frum for HHS Secretary

For ten years now, David Frum has wowed me with the clarity of his critiques of Republican extremism, notwithstanding the craziness of some of his own policy prescription (most in foreign policy; he is, after all, Mr. Axis of Evil).  He's been a hero dissecting and crying out against emerging U.S. authoritarianism for the past year. And in fact, he was doing that too back in 2009/10. Here's from his famous post-mortem on the passage of the ACA in March 2010:

I’ve been on a soapbox for months now about the harm that our overheated talk is doing to us. Yes it mobilizes supporters – but by mobilizing them with hysterical accusations and pseudo-information, overheated talk has made it impossible for representatives to represent and elected leaders to lead. The real leaders are on TV and radio, and they have very different imperatives from people in government. Talk radio thrives on confrontation and recrimination. When Rush Limbaugh said that he wanted President Obama to fail, he was intelligently explaining his own interests. What he omitted to say – but what is equally true – is that he also wants Republicans to fail. If Republicans succeed – if they govern successfully in office and negotiate attractive compromises out of office – Rush’s listeners get less angry. And if they are less angry, they listen to the radio less, and hear fewer ads for Sleepnumber beds.

So today’s defeat for free-market economics and Republican values is a huge win for the conservative entertainment industry. Their listeners and viewers will now be even more enraged, even more frustrated, even more disappointed in everybody except the responsibility-free talkers on television and radio. For them, it’s mission accomplished. For the cause they purport to represent, it’s Waterloo all right: ours.

Back then, Medicaid expansion was a bad thing from Frum's conservative point of view -- something Republicans could have avoided had they negotiated the ACA in good faith:

My take on the ACA marketplace

FWIW, here is a sort of global take on the ACA marketplace, its place in U.S. healthcare delivery, and how I'd change it if I could (unless those who are better informed convinced me otherwise).

1. The experience of basically every wealthy country in the world in distinction from the U.S. suggests that the sine qua non of effective healthcare cost control is some form of government rate-setting -- that is, government control over or oversight of a more or less uniform pricing schedule for medical services and drugs. Whether the government pays providers directly, sets rates for private insurers, or provides oversight  as insurers collectively negotiate rates, some uniformity and oversight is essential to keep healthcare providers from dividing and conquering payers.

2. The ACA marketplace leaves insurers to negotiate their own rates, as in the much larger employer market, but with pricing pressures that render the market viable only for those that pay government rates -- e.g., insurers whose primary business has been managed Medicaid.