Candidates Criticize Medicare For All, But The Public Option Is No ‘Moderate’ Alternative

WASHINGTON – As the conversation about America’s health care future continues to dominate the Democratic presidential primary, CBS News reports that “[f]ormer Vice President Joe Biden’s campaign is rolling out a new digital advertisement in Iowa focused on health care, which he continues to make a signature issue of his candidacy,” while POLITICO reports that U.S. Senator Michael Bennet (D-CO) is running a new television ad in Iowa on the issue of health care.

Both Biden and Bennet are critical of the Medicare for all legislation supported by Senator Bernie Sanders (I-VT), Senator Elizabeth Warren (D-MA) and others, which would eliminate Americans’ existing coverage and start over from scratch with a single one-size-fits-all health insurance system run by politicians, and would force Americans to pay more and wait longer for worse care.  However, the so-called “moderate” fallback Biden and Bennet support – a new government-controlled insurance system called the public option – would ultimately lead to the same harmful results, while causing premiums to “skyrocket” and threatening the care millions of Americans, particularly those in rural communities, depend upon.

In a story headlined “How a Medicare Buy-In or Public Option Could Threaten Obamacare,” The New York Times reports that the public option “could also lead to a 10 percent increase in premiums for the remaining pool of insured people.”  The Times adds:

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 as Dr. Scott Atlas of Stanford University explains in The Wall Street Journal, 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 … Massive taxation would be needed to expand Medicare, whether optionally or not.

Meanwhile, a recent study, conducted by Navigant for the Partnership for America’s Health Care Future, 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,” while RevCycleIntelligence also reports, “[p]atient access to care suffers when a rural hospital closes its doors for good, and consequently, patient outcomes can deteriorate.” 

The Gazette (Cedar Rapids) reports that “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.”

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.”

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