While Republicans are making one last (seemingly futile) push to repeal the Affordable Care Act, Sen. Bernie Sanders (I-Vt.) and 16 Democratic senators are pressing their “Medicare for All” bill, introduced this month.
In a televised debate Monday night, Sanders swatted aside charges that his proposal was radical. “I don’t think Medicare for all is an extreme idea. Every other major country on Earth guarantees health care to all people as a right.” He emphasized that Medicare was the most popular health insurance program in the country. So the thinking goes, why not extend it to everyone?
But the moniker “Medicare for All” is misleading. Sanders’s proposal actually scraps Medicare’s operating model, which mimics the private sector’s insurance-company-based structure, including the use of private insurers for administrative tasks. BernieCare, by contrast, would eliminate the private sector’s role in insurance provision. In fact, Sanders seeks to discard the current patchwork of government and private options: Medicare for the elderly, Medicaid for the poor, employer-provided insurance for the better-off and ACA policies for those who fall through the cracks.
Sanders’s legislation would instead place everyone, except beneficiaries of Veterans Affairs and the Indian Health Service, into one plan. Proposed benefits are generous, covering services ranging from doctor and hospital to mental health and substance abuse care. With the exception of some minor cost-sharing for prescriptions, the plan eschews traditional ways of discouraging services overconsumption, such as deductibles and coinsurance.
But BernieCare faces at least two significant challenges: selling the legislation to voters and creating a program that fairly and efficiently distributes medical services.
The history of health-care politics, especially the two most significant legislative rewrites — Medicare and the ACA — illustrate these challenges and reveal why BernieCare is unlikely to succeed. Medicare garnered much broader political support than the ACA because voters and politicians believed it would complement, rather than undermine, existing health-care arrangements. By contrast, ACA opponents have spent almost 10 years arguing that the program destabilizes the entire health insurance system — a weapon that will be wielded even more effectively against BernieCare.
Medicare passed in 1965, despite fierce resistance from the American Medical Association, because the program was broadly popular. Policymakers, including conservatives and AMA allies, had long warned physicians and insurance industry leaders that if they failed to adequately cover senior citizens, then the public would demand a government program to serve the elderly’s needs.
Attempting to prevent government intervention in health care, physicians and insurers went to great lengths to provide coverage for individuals over 65. Yet, due to the amount of care that the elderly required, the coverage insurance companies offered was meager, and even then, most still lost money on the policies.
This failure produced a consensus across the political spectrum in favor of federally provided health benefits for the aged — a vulnerable and, to voters, “deserving” population. Medicare was but one of many proposals that attempted to achieve this goal. Conservative policymakers and liberal Republicans also offered proposals, which envisioned less centralized authority, but still provided coverage for most seniors.
The program’s final design also contained much for rank-and-file doctors and insurance executives to like, which secured at least reluctant and, in some cases, enthusiastic support from many of them. Medicare allowed doctors to reduce the amount of charity care they supplied and permitted insurers to offload unprofitable aged subscribers while collecting lucrative administrative fees to act as liaisons between the government and service providers.
Additionally, Medicare’s structure was politically palatable because the elderly could receive benefits using the same doctor, hospital and insurance company arrangements to which they had already grown accustomed.
In the end, Democrats enacted their version of the legislation with the support of 70 House and 13 Senate Republicans.
Four decades later, many voters were willing to entertain the idea of the ACA because, as with Medicare, the legislation promised to aid a politically sympathetic group: individuals with preexisting conditions unable to buy insurance in the individual market and workers who made too much money to qualify for Medicaid but lacked the resources or types of jobs that would provide them coverage. Most Americans, moreover, recognized that the health-care system was broken. Accounting for almost 18 percent of the nation’s 2010 gross domestic product, U.S. medical spending was (and still is) by far the highest in the world.
Despite the obvious need for change, the ACA generated more opposition than Medicare. Voters who already had insurance worried that the Democratic proposal would weaken their own health benefits, whether employer- or Medicare-provided. These debates ignited the famous controversy surrounding President Barack Obama’s promise, “If you like your health insurance, you can keep it.”
The bill ultimately passed despite fierce resistance fomented by the tea party, talk radio and Fox News as well as a complete lack of Republican congressional support. Many analysts believe that the ACA’s unpopularity fueled the Democratic Party’s subsequent electoral defeats, at both the national and state level.
This brings us to BernieCare. As in 1965 and 2010, our health-care system desperately needs an overhaul. Though the ACA has become more popular in the wake of Republican threats to gut it, this newfound approval is more of a defensive reaction — an understandable one given the threat to some beneficiaries’ coverage, including those under expanded Medicaid programs and those with preexisting conditions.
Nevertheless, even ACA supporters recognize the program’s serious defects. Many people, despite subsidies, simply cannot afford the extraordinarily high and rising insurance premiums. Some ACA beneficiaries lack the resources to tap into coverage that first requires paying a pricey annual deductible. Others have little choice among insurance companies, if any at all, while some have policies that severely restrict their selection of doctors and hospitals.
Additionally, ACA rules created a new, unintended consequence: encouraging businesses to keep employee schedules under 30 hours a week to avoid providing expensive health benefits. Finally, everyone’s health-care costs have continued to increase.
Notwithstanding these significant flaws, and the opportunities they create for change, the ACA is not paving the way for BernieCare. Once voters understand the proposal’s details and likely ramifications, support for it will quickly erode.
Sanders claimed Monday night that his proposal builds upon our current health-care system. However, rather than mending the ACA or modifying the system in a way that is culturally familiar to voters, the senator’s proposal asks citizens to abandon their current coverage for a central planning experiment. Even the most progressive voters, though ideologically inclined to support BernieCare, will have a hard time backing legislation that requires them to swap their generous employer-provided insurance for the unknown. This is especially true because BernieCare opponents will spend millions warning voters that this unknown will involve service rationing, massive new costs and fewer choices for consumers.
The proposal also requires voters to place their trust in politicians to control the entire health-care sector. That’s a big ask given current skepticism about government competence as well as the inability of policymakers to restrain rising medical costs over the past five or six decades.
The failure of the ACA to bring down health-care prices and insurance premiums, despite promises to the contrary, opens up an easy line of attack on BernieCare. If politicians couldn’t achieve the ACA’s more modest objectives in this regard, can they really be trusted to allocate all the resources in the health- care system? And the scandal-plagued Veterans Health Administration, a prime example of centralized authority, demolishes the claim that policymakers simply need more power to arrange and efficiently manage health care.
Indeed, perhaps the biggest problem with BernieCare is that it draws the focus away from where it should be — revamping the ACA to better contain costs and provide universal coverage on a more equitable basis. It does so for a proposal that has almost no chance of passage.
Contrary to the claims of partisan pundits, Democrats and Republicans should appreciate that bipartisan overhauls have the potential to serve both their interests.
To name one possible solution: Policymakers could lift the heavy regulations they previously placed on doctor cooperatives, alternately known as direct primary care or prepaid groups. When patients directly pay a doctor group, preferably a multi-specialty group, then physicians are incentivized to keep health-care costs down.
While gridlock has prevented most attempts to modify the ACA, such restructuring could be initiated through relatively minor legislative moves — for example, by changing health savings account and ACA rules to allow people to purchase two policies, both from a physician cooperative and from a traditional insurance company in the form of catastrophic coverage.
Democrats could protect and augment subsidies for the less fortunate while campaigning on their ability to diminish corporate, insurance company power. Republicans could trumpet market-based solutions that provide consumer choice and empower physicians and patients, rather than insurance companies, to make health treatment decisions. It’s a win-win solution.
In our current political moment, experts are under attack. Perhaps with good reason. While the history of U.S. health care contains some hopeful vignettes, it is also a story of policymakers who, despite their noble aims, have often failed to achieve economical and socially just results. Long on heart and short on economic rationale, BernieCare pledges to dramatically deepen this tradition.