Health Care & Tonight’s Democratic Presidential Debate

MEMORANDUM

To: Interested Parties
From: Lauren Crawford Shaver, Partnership for America’s Health Care Future
Re: Health Care & Tonight’s Democratic Presidential Debate
Date: September 12, 2019

America’s health care future is sure to be a major topic of discussion for the 10 Democratic presidential candidates debating in Houston tonight.  Here are some key facts for those observing and reporting on tonight’s discussion to keep in mind:

Medicare For All Means Paying More & Waiting Longer For Worse Care:

Independent analysts estimate the cost of Medicare for all could be more than $32 trillion over 10 years, and the nonpartisan Committee for a Responsible Federal Budget (CRFB) finds that “would mean increasing federal spending by about 60 percent (excluding interest)” and “require the equivalent of tripling payroll taxes or more than doubling all other taxes.”

• Voter Vitals – a new quarterly tracking poll conducted nationwide and in 2020 battleground states – finds that a majority of Democratic voters are unwilling to pay any more in taxes for universal coverage, while previous national polling by the Kaiser Family Foundation indicates that six in 10 Americans oppose Medicare for all once they learn it forces families to pay more in taxes.
• While Senator Bernie Sanders (I-VT) and others acknowledge that Medicare for all would raise taxes on middle-class families, Bloomberg examines the claim that families would ultimately save money under the system and finds that “[f]or many Americans, though, that would not be true,” and “higher taxes would exceed any savings.” 
  • They report: “Yet the 181 million taxpayers with employer-sponsored coverage could miss out on the benefits of the Sanders plan, and even those receiving Medicaid could pay more, according to health-care policy experts on both sides of the political spectrum … Sanders has proposed a wealth tax, a bank levy and premiums paid by employers and employees.  But that only raises about half of what is needed, meaning that payroll taxes and income tax increases would necessarily have to be part of the plan … Many of the 181 million taxpayers with employer-sponsored coverage are likely to see their taxes go higher than their current health care spending, because about 56% of their medical costs are covered by their company, according to the Milliman Medical Index, which tracks annual health care spending.  For example, a person making $50,000 with employer-sponsored coverage spends about $5,250 annually on health care, meaning that under Sanders’s plan, her or his taxes would be nearly double the person’s current health care costs … Those on Medicaid, the government-sponsored insurance program for the poor, are likely to see their tax burdens rise far beyond their current health spending, [Brian] Riedl [a senior fellow at the right-leaning Manhattan Institute] said.  A family of four earning $30,000 spends about $1,200 annually on health costs, according to the Kaiser Family Foundation estimates.  Sanders’ plan also assumes that health providers will be reimbursed at Medicare rates, about 40% below what they receive from private insurers.  Health care experts question whether a cut this large is feasible, meaning that the cost for Medicare for All could be even higher.”
• Fact-checkers for The Washington Post note that “[a]ccording to a study from the Urban Institute (and a follow-up paper) … Senator Sanders’s proposed tax increase would be insufficient and that additional revenue would be needed.” CNN reports that “[t]ax experts … say that you can’t raise enough money from taxing the rich and that the levies on all Americans may exceed the savings for more people than Sanders expects.  This may be particularly true of low-income folks who get heavily subsidized coverage on the Obamacare exchanges … ‘His plan still doesn’t add up,’ [Marc] Goldwein [of the Committee for a Responsible Federal Budget (CRFB)] said … ‘To generate the kind of revenue that Sanders is talking about to pay for something as big as his version of Medicare for All … would be vastly more expensive than any of the kinds of things he’s talking about,’ said Howard Gleckman, senior fellow at the Urban-Brookings Tax Policy Center, a nonpartisan think tank.  ‘He’s going to have to come up with more money from some place.’”  That place is the bank accounts of middle-class Americans: “There’s no possible way to finance [Medicare for all] without big middle class tax increases,” CRFB’s Goldwein explained to The Washington Post.
• Senator Sanders saw this exact problem play out in the failed effort to implement a Medicare for all-style system in his home state of Vermont.  Roll Call reported that Peter Shumlin, the state’s Democratic former governor who campaigned on a platform of one-size-fits-all health care, later admitted that the 11.5 percent payroll tax and 9.5 percent income tax proposed to finance the system were too much for taxpayers to accept: “The final bill was too much for the state to bear, he said.  ‘The biggest problem was money,’ Shumlin said …  And he couldn’t promise lawmakers that they wouldn’t need to hike taxes again later to accommodate rising health care costs.  ‘I couldn’t with a straight face turn to them and say, no, we’ve got this figured out,’ he said.” (Video clip here.)

• • The Washington Post reported recently that the Vermont failure “offers sobering lessons for the current crop of Democrats running for president, including Vermont’s own Sen. Bernie Sanders (I), most of whom embrace Medicare-for-all,” adding: “Then as now, many of the advocates shared ‘a belief that borders on the theological’ that such a system would save money, as one analyst put it – even though no one knew what it would cost when it passed in Vermont.  That belief would prove naive.”

• And as Senator Kamala Harris (D-CA) continues to face questions regarding her position on Medicare for all, The Washington Post reports that the 2020 hopeful “admitted … that she had been uncomfortable with Sen. [Bernie] Sanders’ version of Medicare-for-All,” saying “people want choice … I don’t want to be in the business of just taking choice from them without figuring out a way to create options.”
  • However, Senator Harris is still a co-sponsor of Sanders’s Medicare for all bill – which would eliminate Americans’ ability to choose their coverage and instead force every American into a one-size-fits-all government-run system – even continuing to tout her support for the legislation on her U.S. Senate website.
  • Harris’s own Medicare for all plan, which she rolled out amid intense criticism just weeks ago, would still replace every American’s existing coverage with an entirely new government-run system that would eliminate the consumer choice offered through the Affordable Care Act (ACA) and employer-provided coverage.  Notably, eighty-six percent of Americans with employer-provided coverage rate their coverage as “good” or “excellent,” according to a new national poll by the Kaiser Family Foundation.

• The Washington Post’s fact-checkers note that “providers warn [Medicare for all] could significantly hurt their ability to provide adequate, widespread care.  A recent report from the Congressional Budget Office reinforces this concern: ‘Such a reduction in provider payment rates would probably reduce the amount of care supplied and could also reduce the quality of care.’”
  • The non-partisan CBO cautioned recently that under Medicare for All, “patients might face increased wait times and reduced access to care,” and such a system “could also reduce the quality of care,” while “[t]he number of hospitals and other health care facilities might also decline as a result of closures, and there might be less investment in new and existing facilities.”
  • The New York Times reported recently that experts are growing increasingly worried about the “violent upheaval” a Medicare for all system would cause hospitals, cautioning: “Some hospitals, especially struggling rural centers, would close virtually overnight, according to policy experts.  Others, they say, would try to offset the steep cuts by laying off hundreds of thousands of workers and abandoning lower-paying services like mental health.
  • This warning was echoed in a report by POLITICO, which notes that Medicare for all “would all but end private insurance and regulate hospitals in a vastly different way, dramatically changing operators’ business model and costing community hospitals as much as $151 billion a year, according to one estimate published in JAMA,” all while “slashing hospitals’ pay rates and putting up to 1.5 million jobs at stake … It’s a concern that’s left Medicare for All advocates walking a fine line, arguing for a dramatic reshaping of the health system while trying to avoid a brawl with their hometown health systems.”

Americans Don’t Want One-Size-Fits-All Health Care … Including Its Unaffordable Costs:

A new national poll released today by the Kaiser Family Foundation “probes Democrats’ views about the general approaches to expanding health coverage and lowering costs” and finds that “[m]ost Democrats and Democratic-leaning independents (55%) say they prefer a candidate who would build on the Affordable Care Act to achieve those goals.  Fewer (40%) prefer a candidate who would replace the ACA with a Medicare-for-all plan.”  A separate poll released by Kaiser in July found support for Medicare for all on the decline, as “a larger share of Democrats and Democratic-leaning independents would prefer lawmakers build on the existing ACA” and “the share of Democrats who now say they ‘strongly favor’ a national Medicare-for-all plan is down” 12 percentage points in the three months since Kaiser last asked the question.

And, as in past polling, Kaiser’s new survey also found that “large shares” express uncertainty about what proposed new government-controlled insurance systems would mean for them.  The American public’s confusion over one-size-fits-all proposals such as Medicare for all is not surprising.  “Such a sweeping overhaul of the country’s patchwork health insurance system hasn’t been attempted before,” The Washington Post reports, “and even though the 2020 contenders frequently mention it, they tend to shy away from details on exactly how the whole thing would work.”

• Previous national polling data released by Kaiser in June revealed that “majorities of Americans are unaware of the kind of dramatic changes that [Medicare for all] would bring to the nation’s health care system.”  However, “[t]here’s one thing Americans understand about Medicare-for-all: It would mean higher taxes … Americans seem most familiar with the fact that Medicare-for-all would require massively higher taxes,” The Washington Post reports.  As Kaiser noted, “[t]he survey finds eight in 10 Americans (78%) are aware that taxes would increase for most people under such a plan.”

Yet another national poll conducted earlier this year by Kaiser revealed that support for Medicare for all “drops as low as -44 percentage points” when people find out it would “lead to delays in some people getting some medical tests and treatments,” and “is also negative if people hear it would threaten the current Medicare program (-28 percentage points), require most Americans to pay more in taxes (-23 percentage points), or eliminate private health insurance companies (-21 percentage points).”

And Voter Vitals – the Partnership’s new quarterly tracking poll conducted nationwide and in 2020 battleground states – finds that a majority of Democratic voters are unwilling to pay any more in taxes for universal coverage and a supermajority of Democrats (69 percent) support building and improving on what we have today over new government insurance systems

• “A majority of Democratic, swing, and Republican voters are clear that they are not willing to pay any more in taxes for universal coverage.  They’re looking for health care policies that lower rising health care costs more than anything else,” said Phillip Morris, Partner of Locust Street Group, who conducted the survey on behalf of the Partnership for America’s Health Care Future.

Meanwhile, The Washington Post explains in a recent story headlined “Why 2020 Democrats are backing off Medicare-for-all, in four charts” that “[p]olls show why they’re doing this.  On the surface, the idea sounds as if it would appeal to voters.”  But when voters are made aware of the many negative consequences of such a system, including the elimination of private insurance and need for higher taxes, support drops.  The Post notes:

But notice how support declines when people are told that such a program would require getting rid of private insurance … That question didn’t even dig into the potentially politically troublesome detail of how such a plan would be implemented.  Providing health care for all Americans would cost billions of dollars, so taxes on the middle class would go up.  A January Kaiser Health News poll shows a majority of Americans, 60 percent, flat-out opposed Medicare-for-all if that were the case … At the past two presidential debates, Sanders (I-Vt.) was the only candidate to clearly and explicitly acknowledge that the plan would require raising taxes …The other candidates seem to find it politically untenable to simply say, yes, voters’ taxes would go up, and then explain why

And other recent reports underscore the political risks of embracing a one-size-fits-all system:

• The Washington Post reports that “Democrats in swing districts are increasingly worried that the outspoken embrace of Medicare-for-all by Bernie Sanders and other top Democratic presidential hopefuls could hurt their chances of keeping the House in 2020.”
• The New York Times reported recently that some Democratic governors are “anxious” and “alarmed that their party’s presidential candidates are embracing policies they see as unrealistic and politically risky.  And they are especially concerned about proposals that would eliminate private health insurance … Noting that many voters were already uneasy about losing their coverage, [Michigan Governor Gretchen] Whitmer said, ‘I don’t think feeding into that is a good idea.’”
• The Washington Post reported recently that by “veer[ing] left,” Democratic presidential hopefuls are “leaving behind [the party’s] successful midterm strategy.”

The Public Option Is No ‘Moderate’ Alternative:

As Medicare for all “falters,” some 2020 presidential hopefuls – such as former Vice President Joe Biden, Senator Amy Klobuchar (D-MN) and Senator Michael Bennet (D-CO) – are embracing so-called “moderate” fallback proposals such as “the public option” or “Medicare buy-in.”  But recent headlines and studies warn about the severe consequences such a government-controlled insurance system would have on American families’ access to quality care, particularly in rural communities:

• The Gazette (Cedar Rapids): “Iowa’s rural hospitals could experience a loss of more than $476 million dollars under a public health insurance proposal, putting dozens at high risk for closure, according to an analysis … the analysis said those hospitals could be confronted with an even bigger detriment if a public option is implemented using Medicare reimbursement rates … If a public option plan would go into effect, the study found that between 25 and 52 of Iowa’s 90 rural hospitals would be at high financial risk for closure due to a loss of millions in revenue.”
• Las Vegas Review-Journal: “… [H]ospitals lose money on Medicare patients … But if more people were on Medicare, those losses could be unsustainable.  An industry group estimates that more than 50 percent of rural hospitals would face a high risk of closure if a public option were in place.”
• Virginia Public Radio: “… [A]s many as 10 rural hospitals in Virginia could close if the federal government starts offering a public option health plan – the kind of public option that’s now being talked about on the campaign trail by former Vice President Joe Biden and others.”

The new study, conducted by Navigant, finds that the public option could put more than 1,000 rural U.S. hospitals in 46 states “at high risk of closure.”  These hospitals serve more than 60 million Americans, and as Kaiser Health News and NPR report, hospital closures can have “profound social, emotional and medical consequences.”  As RevCycleIntelligence also reports, “[p]atient access to care suffers when a rural hospital closes its doors for good, and consequently, patient outcomes can deteriorate.” 

A study by KNG Consulting found that “[f]or hospitals, the introduction of a public plan that reimburses providers using Medicare rates would compound financial stresses they are already facing, potentially impacting access to care and provider quality,” while an earlier study by Navigant found that government insurance systems such as “buy-in” or “public option” could force hospitals to limit the care they provide, produce significant “layoffs” and “potentially force the closure of essential hospitals.”

Meanwhile, in a story headlined “How a Medicare Buy-In or Public Option Could Threaten Obamacare,” The New York Times reports that “a public option may well threaten the A.C.A. in unexpected ways.”

A government plan, even a Medicare buy-in, could shrink the number of customers buying policies on the Obamacare markets, making them less appealing for leading insurers, according to many health insurers, policy analysts and even some Democrats … [A] buy-in shift in insurance coverage could profoundly unsettle the nation’s private health sector, which makes up almost a fifth of the United States economy.  Depending on who is allowed to sign up for the plan, it could also rock the employer-based system that now covers some 160 million Americans … Siphoning off such a large group of customers could also lead to a 10 percent increase in premiums for the remaining pool of insured people, according to the Blue Cross analysis.  More younger people with expensive medical conditions have enrolled than insurers expected, and insurers would have to increase premiums to cover their costs, Mr. Haltmeyer said.  Tricia Neuman, a senior vice president at the Kaiser Family Foundation, which studies insurance markets, said a government buy-in that attracted older Americans could indeed raise premiums for those who remained in the A.C.A. markets, especially if those consumers had high medical costs … Dr. David Blumenthal, the president of the Commonwealth Fund, a foundation that funds health care research, said a government plan that attracted people with expensive conditions could prove costly.  “You might, as a taxpayer, become concerned that they would be more like high-risk pools,” he said.

And these proposed government insurance schemes would ultimately lead to the same result Americans reject: a one-size-fits-all health care system run by politicians.  This has been acknowledged by Democratic presidential candidates, as well as by journalists and analysts:

• “Medicare for all is what we should be going for, but the first step getting there has to be showing that we can create a public option, or allowing Medicare to be available for more people,” Senator Cory Booker (D-NJ) said to CNN’s Dana Bash on “State of the Union.”
• During the first round of presidential debates, Senator Kirsten Gillibrand (D-NY) said: “The truth is, if you have a buy-in over a four or five year period, you move us to single payer more quickly,” adding that under such a system, “our step to single payer is so short.”  And Mayor Pete Buttigieg (D-IN) emphasized that a “buy-in” or “public option” system “will be a very natural glide path to the single payer environment.”
• NBC News reporter Jonathan Allen explained to viewers that “[t]he public option is essentially a back door to Medicare for all.  You can say all day long if you want it’s not Medicare for all.  But this is a different packaging of how to get there.”
• The Wall Street Journal reports that these government insurance systems represent “stepping stones to single payer,” a fact acknowledged by supporters of such proposals, including Senator Chris Murphy (D-CT), who recently admitted it would bring about the “slow death” of employer-provided and other private coverage and serve as an “on ramp to a single-payer system.”
• Dr. Scott Atlas of Stanford University explains in The Wall Street Journal that such a system would raise costs for families and “mainly erode, or ‘crowd out,’ private insurance, rather than provide coverage to the uninsured.” He writes: “The public option would cause premiums for private insurance to skyrocket because of underpayment by government insurance compared with costs for services …  A single-payer option is not a moderate, compromise proposal.  Its inevitable consequence is the death of affordable private insurance.  Even Democratic presidential candidates calling for “a public option” openly admitted in the recent debate that it would inevitably lead to a single-payer-dominated system.  And although Medicare is popular, it is already unsustainable even without expanding it to everyone.  As the population ages, the taxpayer base financing Medicare is dramatically shrinking.  Nearly four million Americans turn 65 annually; by 2040, that population will reach 87 million, twice what it was in 2012.  Medicare’s Hospitalization Insurance fund will be depleted in 2026, the Medicare trustees predict … Massive taxation would be needed to expand Medicare, whether optionally or not.”

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