Opinion: if Democrats want universal coverage, they must abandon the ‘Medicare for all’ fantasy

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Senator Bernie Sanders’ once-pipe campaign to abolish private health insurance in the United States – most of it employer-sponsored – in the name of “Medicare for All” has now become the main progressive litmus test for anyone seeking to run for the presidential nomination of the Democratic Party. Twelve of the remaining candidates subscribe to it, in different versions.

Sadly, progressives’ rush to upend the entire $ 3.5 trillion U.S. health care system while canceling current health insurance for 217 million Americans is based on serious misconceptions.

It ignores what other countries are actually doing to achieve near universal access to health care; he underestimates the financial consequences for Americans of such a radical restructuring; and it fails to recognize how much easier it would be to achieve the same – or better – health care outcomes by relying on, rather than dismantling, the Affordable Care Act.

While Sanders is correct that most advanced countries guarantee access to health care to almost all of their residents, they don’t necessarily do so through a national, single-payer program like Medicare.

In particular, some of the wealthier northern European countries like the Netherlands, Switzerland and Germany have what might be called “HealthCare.gov for All”, the central element of the Act. affordable care. They provide access to health care by requiring all households to purchase private or non-profit (non-government) insurance policies and subsidize the cost based on income – an approach identical to what ACA offers Americans who buy policies through online insurance exchanges.

Canada has what you might call Medicaid for All, provincial programs that vary in terms of the benefits offered. Provinces are reimbursed by the national government based on provincial need and resource levels, just as our states are with Medicaid. This approach is embodied in the Affordable Care Act’s Medicaid expansion program which – in the 36 states that have implemented it – has made millions of Americans newly eligible for Medicaid by enabling people with incomes higher to qualify.

England has the equivalent of the United States’ Veterans Affairs’ for all ‘health care program, with hospitals and health care providers directly supported by the national government.

In addition, each country so admired by progressive democrats for guaranteeing universal access to health care also has an important role for private insurance. In Canada, two-thirds of all households purchase supplemental private insurance to cover additional benefits and better care (most provided across the border in the United States), as do nearly 50% of Australians and 40% of Danish households, according to a May 2017 Commonwealth Fund report. In Germany, more than 10% of households withdraw completely from the government program and take out private, unsubsidized insurance. (In fact, most Americans on Medicare have additional coverage to fill Medicare gaps.)

The financial foundations of Medicare for All are based on the assumption that great savings will be made by removing the profits and administrative costs of the private insurance industry and that its total cost will be lower (or at least no higher) than the current combined public and private. expenses. Additionally, some advocates say any required tax increases will be offset by savings in health spending and health insurance premiums.

Each assumption is unfounded.

In 2017, according to the Centers for Medicare and Medicaid Services, the administration cost and profit per privately insured individual ($ 618) were actually lower than what government insurance programs (Medicare, Medicaid, VA and the program children’s health insurance) spent on administration. alone ($ 921).

Even Sanders admits that the cost of medicare for all will be staggering. The Urban Institute, a policy research organization, estimates that this approach would add $ 2.54 trillion a year to the federal budget. Even if this were fully offset by the elimination of private insurance spending (currently $ 1.68 trillion), that leaves $ 860 billion a year to be paid by federal taxpayers. Completely eliminating the associated out-of-pocket expenses (currently around $ 170 billion) would still force taxpayers to pay $ 690 billion.

What is most surprising about the Democrats’ advocacy for Medicare for All is their rejection of the Affordable Care Act as a much more realistic foundation for ensuring universal access to health care.

Not only does the ACA incorporate elements of other countries’ approaches to universal health coverage, it has provided health insurance to an additional 20 million Americans, reducing the uninsured rate by more than 40%, according to a recent study by the Kaiser Family Foundation.

ACA has also protected millions of people with pre-existing health conditions from loss of coverage, allowed young adults to be covered by their parents’ insurance, and made the scope of benefits more comprehensive and consistent. for most Americans. And – in a feature that even the Trump administration supports – it has allowed states to test ways to use their Medicaid grant allocations to provide more efficient health care.

Unless overturned by an ongoing legal challenge, the ACA remains the law of the land and can be strengthened to close the coverage gap both by decree (reversing recent actions to weaken it) and by some reasonable amendments.

First, reinstate the requirement that all Americans have health insurance and restore the subsidies that allowed uninsured middle-income people to afford private insurance offered on federal online insurance exchanges. and state. Over 14 million more Americans can get coverage this way and it would have the added benefit of expanding the insurance risk pool, lowering the cost of insurance premiums for everyone.

Second, improve incentives for the 14 states that have refused to join the Medicaid expansion program to do so. This would immediately insure an additional 2.5 million Americans.

Finally, to achieve universal coverage, offer a low-cost public health insurance option (as former Vice President Joe Biden advocates) to the 10 million Americans who can’t even afford subsidized private policies. , but who have too high an income to be eligible. for Medicaid.

Together, these fixes would cost around $ 200 billion a year, much of it in lost taxes.

All Americans deserve access to health care equal to or better than that of other advanced countries. However, that doesn’t require a massive disruption of an industry that makes up one-fifth of the US economy, or legislation that has no realistic chance of being passed, or a wildly extravagant increase in the federal budget.

ACA has already come a long way in the United States towards universal access. Building on it with eminently achievable reforms can finish the job.

Peter D. Salins is Professor of Political Science at Stony Brook University.

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