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Policy Matters: Dude, Where’s Their Health Care (Plans)?

Last year, health care became a huge issue in the midterm election thanks to President Donald Trump’s drive to “repeal and replace” the Affordable Care Act (ACA, or Obamacare). Next year, many Democrats are betting that health care will take center stage again once voters have the opportunity to “repeal and replace” Trump and his health care agenda.

So what is the Democratic Party’s health care agenda? Well, it depends on who we ask. And in today’s “Policy Matters” special report, we break down for you what the 2020 presidential candidates actually mean when they talk about health care.

How did we get here?
Photo by Andrew Davey

In past stories, we’ve honed in on the Trump administration’s drive to destroy the ACA. While the Trump administration has officially endorsed the State of Texas’ federal lawsuit to overturn the entire 2010 health care law, the White House has also pursued executive actions (such as re-allowing “junk insurance” bare-bones plans and inviting states to flout the ACA’s protection of patients with pre-existing conditions) meant to undermine the ACA’s goals of limiting health care costs and providing comprehensive coverage to more Americans.

Trump sought to do away with the ACA entirely in 2017, and he succeeded in getting the then Republican-run House to pass his preferred “repeal and replace” legislation that May. But when it reached the Senate, Majority Leader Mitch McConnell (R-Kentucky) tried various repeal bills until settling on “skinny repeal”, which failed when Senators Susan Collins (R-Maine), Lisa Murkowski (R-Alaska), and John McCain (R-Arizona) voted with Democrats to keep the ACA whole in July of that year. 

Then Senator Dean Heller (R) teamed up with Senators Lindsey Graham (R-South Carolina) and Bill Cassidy (R-Louisiana) to temporarily revive Trump’s hopes of ACA repeal in September 2017, but their bill also failed to attract 50 Senate votes. They only succeeded in zeroing out the ACA’s individual insurance mandate as part of Republicans’ December 2017 tax bill, and in December 2018 Texas federal judge Reed O’Connor ruled that setting the insurance mandate to $0 essentially mandates the nullification the entire ACA. This case, Texas v. Azar, is now pending in the Fifth Circuit Federal Court of Appeals, and it potentially sets up the U.S. Supreme Court to (again) decide the future of American health care… If one of the Democratic presidential candidates doesn’t beat Trump and convince Congress to beat the courts to this punch.

So how exactly might Bidencare enhance Obamacare?
Photo by Andrew Davey

Seven years before Trump attempted to move heaven and earth to repeal Obamacare, it was then President Barack Obama who successfully maneuvered with then House Speaker Nancy Pelosi (D-California) and Senate Majority Leader Harry Reid (D) to pass it into law. They had to make some difficult choices, such as agreeing to conservative Democrats’ demands to restrict insurance coverage of abortion and scuttling progressive Democrats’ hopes for a public health insurance option open to all. But ultimately, they concurred when then Vice President Joe Biden hailed the ACA’s final passage in March 2010 as a “big f–king deal”. 

Flash forward to 2019: Biden is now running to essentially finish what progressives wanted to start with the original ACA. While his position on restricting public and private insurance coverage of abortion care remains murky at best, he’s been clearer in his desire to not only add a nationwide public health insurance plan as an option on ACA insurance exchanges (as progressives were hoping for in 2009 and early 2010), but also make it available to Americans who currently obtain insurance through work and those without any present health insurance. 

Photo by Andrew Davey

What makes this another “BFD” is that unlike the proposed 2009-10 public option that would have only been open to consumers seeking individual insurance coverage on the ACA exchanges, the Biden 2020 public option has more potential to cover more Americans and deliver lower costs through further expansion of Medicare’s purchasing power. In addition, Biden’s plan expands access to the consumer subsidies for insurance plans on the ACA exchanges and further limits the amount of one’s income that can go toward paying insurance premiums. And on the evergreen hot-button issue of prescription drug costs, Biden proposes a suite of measures, such as capping pharmaceutical price increases at the overall rate of inflation and allowing Medicare to negotiate bulk purchase discounts, as cost-saving solutions.

So why are many progressives not impressed with Biden’s health care plan? For one, Biden’s own website admits that some ten million Americans will likely remain uninsured. When it comes to the more generous subsidies Biden wants for ACA exchange plans, that will probably only benefit the under 10% of Americans who buy individual insurance on the exchanges. And on overall health care costs, the continuance of multiple insurers likely limits the potential for reducing overall costs due to health care providers having to bill individual patients and/or insurers rather than adopting a streamlined global budget payment system akin to Canada’s Medicare system.

They say “Medicare for All” (who want it), but what do they really mean?
Photo by Andrew Davey

When we listened to South Bend, Indiana, Mayor Pete Buttigieg talk about his vision of “Medicare for All” in April, we noticed something different. Unlike others’ plans to phase out private insurance and specifically move the entire nation into single-payer health care, Buttigieg endorsed a public Medicare plan that anyone can buy into. 

Buttigieg has since formalized this concept as “Medicare for All Who Want It”, and his plan largely mirrors Biden’s in capping public and private insurance premiums at 8.5% of one’s income, allowing ACA exchange consumers and those who’ve been covered by employer plans to opt into the Medicare-style public option, and banning “surprise billing” for out-of-network emergency care. In addition, Buttigieg just released a new plan that includes a new surtax on pharmaceutical companies and the federal government declaring “eminent domain” over pharmaceutical intellectual property to curb prescription drug costs.

Photo by Andrew Davey

When she first announced her run for president, Senator Kamala Harris (D-California) had already co-sponsored Senator Bernie Sanders’ (I-Vermont) “Medicare for All” single-payer legislation. Yet in late July, she suddenly changed course and released her own “Medicare for All” plan that can more accurately be described as “Traditional Medicare or Medicare Advantage for All” due to her proposal to restructure the entire insurance market over ten years along the lines of Medicare’s current offering of its traditional public plan and a variety of Medicare Advantage plans that are privately run but offered through Medicare.

Unlike Biden’s and Buttigieg’s respective plans, Harris’ plan promises a universal baseline of expanded coverage (including all reproductive health care) and a universal $200 annual cap on out-of-pocket expenses (including prescription drug costs). Also unlike Biden’s and Buttigieg’s plans, Harris’ plan will likely cause more systemwide disruption by banning skimpier plans that won’t qualify under her “Medicare for All” standards. Yet unlike single-payer, Medicare Advantage’s 13.7% overhead costs (slightly higher than the private insurance average of 12% of the premiums they charge) likely mean that Harris’ plan won’t deliver the level of savings comparable to true single-payer.

And finally, “Medicare for All” single-payer
Photo by Andrew Davey

Since his last presidential run in 2016, Bernie Sanders has run on a platform that includes “Medicare for All” single-payer health care. And thus far this cycle, Senator Elizabeth Warren (D-Massachusetts) has also promised single-payer if she defeats Trump next year. Under the “Medicare for All” single-payer bill Sanders introduced in April and Warren continues to co-sponsor, the federal government will move all Americans into one public health insurance plan in four years. And not only will this be any single-payer plan, but it will be one that covers everything from primary care to vision and dental care while charging patients no (traditional) premiums or deductibles.

But of course, there is a cost somewhere: Sanders’ Senate office previously identified multiple potential “pay-for’s”, including a 4% income-based surtax on those earning more than $29,000 (for a family of four), a 7.5% corporate income surtax on companies that exempts the first $2 million in payroll, the re-establishment of a 70% top bracket for personal income tax, a new 77% estate tax rate on inheritances worth over $1 billion, and a “wealth tax” on multimillionaires’ and billionaires’ assets along the lines of the ones Warren and Sanders are now running on. Critics have argued that both of their “wealth tax” plans are destined to be overturned by the Supreme Court, but the two campaigns and multiple progressive economists have countered that a “wealth tax” is simply an extension of the property tax that’s already been upheld by multiple federal courts over the years.

Photo by Andrew Davey

Biden, Buttigieg, Harris, and other candidates have honed in on that other option of a 4% income-based surtax to call out Sanders and Warren for “raising taxes on the middle class”. However both have countered that even if they adopt that 4% surtax (which still isn’t a given), middle and lower-income Americans will still come out ahead due to the elimination of (traditional?) premiums and other out-of-pocket costs. In addition, some progressives have pointed to the global budget payment provision in the House “Medicare for All” single-payer bill introduced by Rep. Pramila Jayapal (D-Washington) as a powerful solution to bring down overall health care costs.

Hopefully, this overview has helped in explaining what these candidates are talking about. We may look at additional “Policy Matters” items in the near future, depending on how our schedules are looking in the coming weeks. In the meantime, never hesitate to ask your own questions. Never hesitate to demand answers, and to seek the truth.

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