M4A, ACA, UHC, Single Payer: Making Sense of Candidates’ Healthcare Policies

By Ron Lambert.

Health Care is one of the key issues being debated by the democratic presidential candidates.  But it can be difficult to discern the differences between the candidates’ health care proposals.  Terms like Medicare for All, Single Payer, Public Option, and Universal Health Care can mean different things depending on their context.  Defining these terms will help clarify the candidates’ proposals.

First, what is Medicare?  Medicare currently provides health insurance for people 65 and older, people approved for social security disability insurance (SSDI), and people with end stage renal disease.  (See https://www.nytimes.com/2019/02/19/upshot/medicare-for-all-health-terms-sanders.amp.html.) Traditional Medicare pays doctors and hospitals a government-set fee for each service provided.  The cost of care is shared between the government and the patient, with Medicare generally paying about 80 percent of the cost.  People with Medicare may choose to purchase supplemental insurance to cover their share (deductibles and copayments) of the costs.

Original Medicare covers Part A (inpatient settings) and Part B (outpatient settings).  Medicare does not cover some services, such as vision, dental, and long term care (except it does cover limited skilled nursing facility care).  Under Part C, people with Medicare may choose to enroll in private Medicare Advantage plans.  Medicare pays the Medicare Advantage plan a monthly per capita amount for each enrollee, and the plan is responsible for providing all of the enrollees’ Medicare-covered (Part A and B) health care services.  The plan may offer additional benefits that traditional Medicare does not cover, and may (or may not) charge the enrollees a premium.

People enrolled in a Medicare Advantage plan must stay within the plan’s network of providers, or pay for services themselves if they go outside of the network. Currently, about a third of the people with Medicare are enrolled in a Medicare Advantage plan.  Part D is prescription drug coverage.  Many people choose a standalone Part D plan or may enroll in a Medicare Advantage plan that includes prescription drug coverage.  Part D plans are private insurance companies.  Premiums, copays/deductibles, and covered drugs vary by plan.

Single Payer is a government-run health care system under which everyone gets their health care from one insurer.  Canada’s health care system is single payer.  Traditional “fee-for-service” Medicare is an example of how a single payer approach could be structured.  But Medicare is not currently a Single Payer approach, because Medicare Advantage plans pay their provider network.

A Public Option would allow people to choose a government-run insurer, rather than a private insurance company.  For example, people could pay a premium to buy into Medicare (or Medicaid); or, a new program could be set up by the government that people could buy.  Under a health care system that includes both public and private insurers, the Public Option would be an alternative to private insurers.  It could also be a default option for people who cannot afford private insurance.

Universal Coverage is when everyone has access to the health care system.  This is consistent with the concept that health care should be a “right”.  Universal Coverage can be Single Payer; it can be a combination of private and public insurers (with the public option guaranteeing access); or, it can be a system of competing private insurers, where the government makes the premiums affordable for everyone via subsidies.

Medicare for All is a system under which everyone would get health insurance through an expansion of the Medicare program.  The system could rely on Medicare’s current structure, or it could add benefits and/or reduce copays and deductibles.  It could maintain a role for Medicare Advantage plans, or eliminate private insurers entirely and adopt the traditional fee-for-service approach.  Medicare for All is an example of Universal Coverage that may or may not be a Single Payer system.

So, where do the democratic presidential candidates stand on reforming the health care system?  Let’s look at the proposals from the six candidates who participated in the January 14, 2020 debate (Andrew Yang having dropped out since the most recent February 7, 2020 debate):

Medicare for All was brought into prominence during Bernie Sanders’ 2016 campaign.  Sanders’ “Medicare for All Act of 2019” (which was cosponsored by Elizabeth Warren, as well as other former presidential candidates) is his latest proposal.  It covers all Americans under a single payer system, effectively eliminating private insurers and employer-based coverage.  The services covered under Medicare for All would be much more comprehensive than Medicare (e.g., to include dental, vision, hearing, mental health, and other services).  Deductibles, copays, and insurance premiums would disappear, and taxes would increase.  Sanders proposes a 4 percent tax on income above $29,000.  He believes the tax increase would be substantially less than what most people currently pay for premiums and cost sharing.  Payments to providers would be reduced to Medicare payment levels.  Medicare for All would include a 4-year period to transition everyone to the single payer system.

Elizabeth Warren’s current proposal is similar, but calls for a slower transition.  Initially, an optional government-run plan would be implemented.  Private insurance would not be abolished initially.  Then after a period of time (currently anticipated to be about 3 years), the transition to Medicare for All would begin.  Warren would not raise taxes on the middle class (making health care essentially free for most Americans).  Instead, she proposes a wealth tax on people with over a billion dollars, and an increase in taxes on large corporations.  She would also raise revenue by diverting all employer health insurance contributions to the government.

In contrast to the Medicare for All Act (which would massively change the structure of the health insurance industry), Joe Biden’s proposal would build upon the existing Affordable Care Act (ACA).  Biden would effectively restore the ACA to the structure it had prior to the Trump administration, and would add a public option that would automatically enroll people in states that chose not to expand Medicaid under the ACA.  People could keep their employer-based coverage or could buy into the public option through the existing exchanges.

Pete Buttigieg proposes “Medicare for All Who Want It”.  Like Biden, Buttigieg would create a government-run public option; and would boost subsidies for people who wish to buy into the program by capping premium at 8.5 percent of income.  But Buttigieg’s proposal would also cap hospital and provider prices at 200 percent of what Medicare pays, and would add an out-of-pocket cost cap to Medicare.

Amy Klobuchar supports expansion of the ACA.  A public option would be available for people to buy into Medicare or Medicaid.  Klobuchar also supports lowering prescription drug costs by allowing Medicare to negotiate prices and by lowering prescription drug costs by allowing Medicare to negotiate prices and by permitting purchase of drugs from countries like Canada.  

Tom Steyer also wants to build on the ACA, with automatic enrollment in a public option for the uninsured.  The public option would be available to others through an expansion of the Medicare program. He also wants Medicare to negotiate drug prices.  

 

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