Note: “I do not view the Center for American Progress’ plan as moving to single payer. Instead, it would actually cement the private Medicare Advantage Plans into our healthcare system. Although it is referred to as a public option in the article below, it differs in that it would allow people to purchase Medicare plans, including private Medicare Advantage plans.
The CAP plan has minimal health savings reforms – it relies on controlling payments for care using unproven systems such as bundling. It will fail to have administrative savings because it allows the private employer plans to remain. These make up the majority of people who have health insurance.
The good news from this article is that health reform advocates are not falling for this proposal. We know that National Improved Medicare for All is the smallest step we can take to solve our healthcare crisis in a lasting way. It provides the base upon which we can improve the system. Anything less, such a the CAP plan, will maintain the root causes of the healthcare crisis and so will fail.” – Margaret Flowers
By Zaid Jilani for The Intercept
The last two times Democrats seized both the White House and Congress, in 1993 and 2009, they immediately embarked on efforts to reform the national health care system. Both times, those efforts contributed to wave election wipeouts in the following cycle.
This near-trend has veteran Democrats skittish about a third go at it in 2021, but the choice likely won’t be theirs to make. The strong and growing enthusiasm for “Medicare for All” would force health care reform onto the agenda of whichever Democrat, if any, manages to get elected in 2020.
With that popularity in mind, the party’s centrist wing, along with everybody else to the right of Sen. Bernie Sanders, I-Vt., has begun thinking which reforms short of single payer might be feasible if the window of opportunity opens. Last fall, Sen. Tim Kaine of Virginia, Hillary Clinton’s running mate in 2016, teamed up with Sen. Michael Bennet, D-Colo., to introduce what they called Medicare X, a bill that would essentially create a public insurance option.
Sen. Brian Schatz, D-Hawaii, meanwhile, has his own Medicaid buy-in plan, which would utilize the public program that is in many ways superior to Medicare when it comes to coverage and copays. And Sen. Chris Murphy, D-Conn., has put together what he says is possibly the quickest on-ramp to single payer.
A leading Democratic Party-aligned think tank, the Center for American Progress, or CAP, is now offering a proposal that looks much like the Kaine-Bennet bill that allows people to voluntarily buy in to a Medicare-like plan.
The plan differs from the one offered by Sanders in a number of ways. Sanders’s plan — dubbed “Medicare for All” — would move the United States toward a Canadian-style system. All Americans would be covered by a Medicare plan with no deductibles and no copays. It would break the link between employment and health insurance, and private health insurance companies would be relegated to only providing supplemental coverage, similarly to how they operate under the current Medicare system.
CAP’s plan, called “Medicare Extra for All,” would instead offer a public plan (Medicare Extra) as a choice that Americans as individuals and employers could opt into. Unlike the Sanders plan, for most people there would be deductibles, copays, and out-of-pocket limits, but these would exist on a sliding scale that varies with income.
During the 2009 debate over health care reform, the public option was on the unattainable outer edge of the debate, while single payer was ruled off-the-table as too outlandish. The CAP plan is effectively a reworking of the public option, signaling just how far left politics has shifted.
On access to abortion services, though, the party establishment still has some ways to go: A big difference between the CAP plan and that of Sanders is that Sanders’s plan repeals the Hyde Amendment, which prohibits taxpayer dollars for abortion services. CAP’s plan does not touch the issue.
Some pundits have praised CAP’s alternative proposal for being more politically viable because, even though it would make health care would be more expensive and more complicated for the average person than the Sanders plan, it would also be less disruptive to the existing health insurance market.
“Substantively, the Sanders approach has a huge advantage: simplicity. But the experience of the last 25 years — across both Bill Clinton’s and Barack Obama’s presidencies — shows the dreadful politics of pushing people out of their current insurance plan. That’s why Obama promised, ‘If you like your plan, you can keep it.’ And why he got in so much trouble when the promise proved false,” the New York Times’s David Leonhardt wrote, expressing concern that lifting someone out of their existing plan and automatically placing them into the “Medicare for All” system would lead to political pushback.
The reason to automatically enroll patients in the Medicare system, single-payer advocates have long argued, is not only its simplicity, but also its efficiency. A huge portion of current health care costs are due to the private insurance market’s paperwork and bureaucracy. Single-payer advocates have estimated that switching to a single-payer system could save $350 billion annually by eliminating private insurance’s primary role in health care.
Sanders told The Hill that he believes the CAP proposal is a step in his direction: “I believe in a ‘Medicare for All,’ single-payer, but to the degree that people are talking about guaranteeing health care to all people, it’s a step.” But he also continued to promote his idea of cutting private insurance companies out altogether, saying, “I think that the most cost-effective way to do that is by expanding Medicare, eliminating the private insurance companies, and then saving tremendous amounts of money in administrative costs.”
In interviews with The Intercept, longtime single-payer advocates offered similar reactions to CAP’s plan, viewing it as significantly weaker than the Sanders proposal but perhaps a step in their direction.
Max Fine, the last surviving member of former President John F. Kennedy’s Medicare Task Force and a single-payer advocate, told The Intercept that the plan would do little to reduce the inefficiencies in American health care.
“This proposal would be a boon for the private health insurance industry by adding both costs and complexity to our inefficient, ineffective, semi-functional health care non-system — most of which would remain in place,” he wrote in an email to The Intercept.
National Nurses United, the country’s largest nurses union, has made passing single-payer a priority, backing both Sanders’s plan at the federal level and various state efforts to establish such a system.
They see the CAP plan as movement by the Democratic establishment toward expanding Medicare, but believe it falls short of the policy goal of single-payer.
“We see it as a significant recognition by the ‘neo-liberal’ wing of the Democrats that the future of healthcare lies with expanding and improving Medicare, given its popularity and that it works,” Michael Lighty, director of public policy at the union, wrote to The Intercept in a statement.
The CAP proposal is of course not single-payer and not a solution to the escalating out of pocket costs workers face in their employer plans, nor does it achieve the savings of a true Medicare for All system. CAP, like United States of Care, and the new Bezos/Buffet/Dimond [sic] company, now acknowledge that the commercial insurance companies are the problem. Putting CEO’s in charge or keeping the costly employer plans in place is not the solution, but recognizing that the insurance companies are the problem is a start. Our view remains that only guaranteed healthcare through an improved Medicare for All can contain prices and therefore costs, eliminate the deductibles and co-pays that burden US workers and end the denial of care and narrow networks that insurance companies have imposed on us.
Adam Gaffney, a Harvard Medical School pulmonary specialist and the president-elect of the single-payer advocacy group Physicians for a National Health Program, agreed with Lighty that the proposal represents movement by the Democratic establishment. “On the one hand, I think this reflects the fact that the Democratic establishment is finally responding to its more progressive base,” he conceded, comparing it to former presidential nominee Clinton’s proposal for a modest public option. “In many ways, it does much more than previous establishment proposals.”
But he believes that the proposal would keep most of the American health care system’s problems in place — ranging from the inefficiencies of leaving hospitals and doctors to deal with paperwork from hundreds of different insurers, to significant out-of-pocket costs.
“You would not be able to unlock those efficiencies [associated with single payer],” Gaffney noted. “This plan would not unlock those efficiencies by virtue of the fact that the health care system would still be fragmented — with private insurance, you have traditional Medicare, you have ‘Medicare Extra,’ you have the program that covers federal employees. Hospitals would still be dealing with different payers.”
He pointed to the CAP estimate that some middle-class families would have actuarial values of 80 percent, which could incur significant out-of-pocket costs that would not exist under the Sanders plan.
“They say that people with middle incomes would have actuarial values of 80 percent, so that means that 80 percent of your health care costs would be covered. And that leaves room for significant out-of-pocket costs. That 80 percent actuarial value is similar to 80 percent actuarial value on the gold plan in Obamacare,” he said. “And if you look up what an actuarial value looks like for a gold plan, [there are] still significant out-of-pocket payments. We know we don’t need to do that. We know that Canada does not have copayments to doctor visits or hospitalization; we know the U.K. doesn’t have it for either of those things.”
Gaffney also doesn’t buy the argument that moving people from private health insurance plans to Medicare, as Sanders’s plan does, would cause a big political backlash. “People care about being able to go to their doctors and what they’re paying out of pocket,” he said, arguing that people are not sentimental about their plans so much as their doctor and hospital. “They don’t really care about the brand name of their insurer. So if you give everybody a plan that has no network, that has no out-of-pocket payment at time of use, I think you’ll find that people are far happier.”
The grassroots pro-Sanders group People for Bernie, which organized people to support Sanders during the 2016 presidential race and now supports progressive legislation and candidates, was blunt in its response to the CAP plan, arguing that activist energy is behind “Medicare for All,” and that any compromise at this point is opposing those activists:
Fine suggested an alternative incremental approach to single payer if something like the Sanders bill fails to pass in the future: Add children and military veterans to the Medicare program, and then adults between the ages of 60 and 65. This would unlock what he calls an “important conservative result: The VA hospital system would become available to all, for services and for badly needed additional training hospitals for young doctors.”