Two months ago I wrote an article that there were other ways besides single payer to achieve universal healthcare. And this is still true; there are more regulated multi-payer states in the world then there is single payer, including the nations I referenced in my article, Switzerland and the Netherlands. But what I did not appreciate at the time is that in those countries, for the most part, those multi-payer entities are not for profit. They also operate under a corporate ethic that is very different than our own, one that is concerned with public perception and long-term sustainability as it is with shareholder demands and quarterly earnings.
As you may have heard, the insurance giant Aetna is now planning to exit all but a few insurance exchanges for 2017, mainly because it was not allowed to become an even bigger giant by merging with Humana, a move effectively killed by the Justice Department. This comes a few months after United Healthcare Group announced it, too, was exiting the exchanges. Because of these exits, and the already scarce levels of choice and competition in many rural counties and states, in nearly 25% of all counties there is only one insurer to choose from, and as of right now for 2017, there is one county in Arizona that has zero insurers to choose from. There is no existing provision to deal with the lack of choice or even what to do if there are no insurers to choose from, and unless we take back both chambers of Congress, even a Clinton landslide won’t humble the GOP into helping us make legislative fixes and upgrades to the Affordable Care Act. There are no modern Eisenhower’s in today’s GOP ready to make peace with the Affordable Care Act the way he did with the New Deal. Better to let people suffer to score political points.
What we are seeing increasingly in one out of four counties and growing, is defacto single payer. But instead of an efficient, not for profit public provider like Medicare, they are largely for-profit insurers who can charge whatever they feel like, with only a few states using regulatory powers to trim back their obscene premium increases. These increases are passed on to plan enrollees and us taxpayers in the form of increased premium subsidies. Instead of your choice of a provider like you get with Medicare, you now get narrower and narrower networks.
On paper it made sense. The government would use its powers to create regulated markets with consumer protections like guaranteed issue and no discrimination based on gender or health status, and only modest premium differences based on age and smoking status. Everyone would be required to make a financial contribution towards their health care if they could (the law has over a dozen and half partial and total penalty waivers and exemptions) or pay a penalty. In return, to help make healthcare affordable, people would be provided assistance in the form of either expanded income eligibility for Medicaid, or sliding scale premium and cost-sharing subsidies to purchase your choice of insurance plans on the state or federal exchange.
But like all well-laid plans, reality has proven more humbling and difficult. The first blow came in 2012 when the Supreme Court ruled that states could voluntarily opt out of the Medicaid expansion. Republican politicians in states they controlled saw a political opportunity and vowed to refuse the expansion. Even though their taxpayers were already paying for it whether they expanded it or not, and their state governments would get a few years at no cost to them and slowly declining to a still incredible deal of $9 of federal aid for every $1 in state costs. Not to mention the hundreds of thousands of jobs and rural and safety net providers put at financial risk. At one time, 30 states refused to expand Medicaid, with time this has thankfully reduced to 19, but still leaving nearly 5,000,000 Americans uninsured who would otherwise be covered by the expansion, and these are some of the most economically and often medically vulnerable people in the country.
The next problem came with the entire notion of “Managed Competition.” Beyond the failures of luring in a plethora of insurers to compete for enrollees in many regions of the country, in the long term, the idea of a competitive market is detrimental to the public health. The average beneficiary in large group plans remains with an insurer is about seven years. It is far less in the small group and individual markets. An insurer has no financial incentive to make investments in their beneficiaries’ long term health, or even in chronic disease management. What is the point of approving the expenditures when the payoff will be down the road when the beneficiary is with another insurer? The insurer, in their view, would be making the investment in improving the bottom line of their competitors which makes no economic sense. However, in a single payer system where the covered individual is going to be with them from birth to death, such investments are fiscally prudent in maintaining sustainable long-term costs.
So not only is there a lack of choice in many areas, even where it is a success regarding choice of insurers, there still isn’t a financial incentive for insurers to approve many medical services that may only see payoffs years or decades down the road. Especially for middle-aged and near retirement beneficiaries as they know it’s all just a waiting game until they move on to Medicare. Even if we get lucky enough to make necessary legislative fixes and upgrades to the law, I don’t see it being a sustainable system unless there is a fundamental transformation in corporate culture, at least with insurers, or we use the law to start gradually moving us in the direction of Medicare for all.
Now do not get me wrong, for 20,000,000 Americans and growing, this law has been an absolute Godsend, including for my family. It is not an exaggeration to call it a life saver for millions of Americans. And for the short term, despite the right-wing rhetoric, the markets are working quite well in a lot of states, especially California, and it has on many different metrics exceeded the expectations of even its proponents. We are far, far better off with this law than the previous status quo. And despite what some people may believe, there was zero chance for single payer to happen in 2009 and 2010. We barely got what we have through Congress, and it took every legislative trick in the book and a lot of arm twisting and cajoling to pass. It wasn’t just Republicans who were against it, several key members of the Senate on our side like then-Finance Chairmen Max Baucus and then Senator Joseph Lieberman, representing the insurance capital of America, the great state of Connecticut. They flat out opposed not only single payer, but even a Medicare buy-in for the middle aged, a public option or even a so-called “trigger” for a public option in the event not enough insurers entered a market. Single payer was simply not going to happen then.
And while I now believe single payer in the form of Medicare for all should now become the ultimate long-term policy objective of the Democratic Party, I am still a realist. Despite the incredible success of Bernie Sanders, a proud and unabashed democratic socialist getting over 45% of this year’s primary vote, netting the same number of primary votes as Trump did in the GOP primary, there are still nearly unmovable obstacles between progressives and Medicare for all. While an ascendant progressive majority is inevitable in the near future for the Democratic Party and the medium-long term for the nation, unbelievably powerful special interests and the entire conservative apparatus still will stand against them.
Insurance companies will be in an existential battle for their very survival. They will have every reason to spend hundreds of millions, even billions of dollars, on organizing and lobbying against single payer. Pharmaceutical companies, for-profit hospitals, and groups representing medical professionals will have a strong financial incentive to fight Medicare for all as it will mean either real immediate cuts in reimbursements, or a dramatic slowing in their growth as well as a loss of bargaining power. Republicans and the entire conservative network of donors and groups believe single payer to be the final nail in the coffin of a free market America and the final sign of a permanent welfare state. Many even believe it would lead to real death panels and rationing, especially for the elderly, and the transformation of America into a truly socialist state.
Americans, in general, seem to poll quite favorably to the idea. But voters in general, when ultimately presented with anything that means a dramatic and sudden change from the status quo, tend to back quickly off of support for such changes, especially if it means changes to them personally. Just like Congress has an abysmal 11% approval rating, incumbents have a 90% re-election rate. American’s hate Congress but generally they like their own representative, and Americans hate insurance companies, but generally like their insurance plan. We should always be skeptical of any poll showing public support for major sweeping changes to the status quo. Their support quite often is a mile wide and an inch deep, and our opponents know this and are experts at undermining support for progressive measures outside of the realm of cultural and social policy.
Taking all of the powerful stakeholders lined up against single payer, and the small “c” conservative nature of the electorate, we need to be realistic as much as we are persistent. Odds are there is never going to be an opportunity to implement Medicare for all in one legislative act. It likely will require several incremental steps until we are at a point where the vast majority of people are already covered under a public insurer of some sort, and all that is needed is legislative action to formalize it all under one public benefit.
Our first step should be support for a robust public insurance plan tied to Medicare rates, and either a “buy-in” option for Medicare for the middle aged, or lowering the eligibility age to 60, 55, or even 50. This would dramatically reduce insurance premiums for the rest of the market by taking tens of millions of the most expensive (per capita) patients out of the private insurance pool, saving families and businesses billions in reduced premiums, requiring only a modest increase in the Medicare tax to finance it.
Another popular step would be to cover children and college-aged students all under a beefed up version of Medicare. These are the cheapest people per capita to insure, and the political argument against covering all uninsured children, and saving families with insurance coverage for their children thousands of dollars, is an unbeatable argument. Even congressional Republicans couldn’t argue against this in the nineties when first lady Hillary Clinton championed and pushed through CHIP, the state and federal Children’s Health Insurance Plan. Doing this would also make moving toward single payer a lot easier as eventually everyone will not only think of Medicare as something they will eventually use but something they used in their childhood and through their early twenties, it won’t be an unknown or something that only their Grandparents use. We would be creating a brand new constituency in the coming decades among young adult voters who will have aged out and experienced Medicare first hand, and no doubt will find the private insurance market wanting.
Even these steps will be fought tooth and nail by the very interests I talked about earlier, as they know where it all will eventually lead to their end. We need a version of the grassroots power and small dollar fundraising prowess of the Sanders campaign into a centralized and massive progressive political action committee. A group that could raise hundreds of millions or even billions of small dollar donations, along with big donations from wealthy progressives that could be marshaled not only with helping to elect progressives but with going toe to toe against the deep-pocketed special interest groups. They will use astroturfing, and mega ad buys to fight progressive progress toward single payer. But with our own well-financed and coordinated group, with not only our advantages in organizing and small-dollar grassroots donating, but the left’s inherent advantage in social media, technology, and the arts, it no longer would be a David versus Goliath battle.
For the first time in modern political history, we would have ourselves a fair fight.