American Families Can’t Afford & Don’t Want New Government-Controlled Health Insurance Systems

MEMORANDUM

TO: Interested Parties
FROM: Lauren Crawford Shaver, The Partnership for America’s Health Care Future
RE: American Families Can’t Afford & Don’t Want New Government-Controlled Health Insurance Systems
DATE: January 14, 2020

As presidential candidates prepare to take the debate stage again tonight, a new issue brief released yesterday by FTI Consulting and the Partnership for America’s Health Care Future is just the latest reminder of the unaffordable costs and negative consequences American families would face under proposed new government-controlled health insurance systems.  The report warns that Medicare for All “could have a significant negative impact on the adequacy of the country’s health care workforce, access to care, and, ultimately, patient outcomes.”

Throughout the last year, studies and experts have confirmed time and again that Medicare for All would cause American families to pay more to wait longer for worse care.  And while some candidates tonight will try to paint other new government-controlled health insurance systems – such as the public option and Medicare buy-in – as “moderate” proposals, these would ultimately lead to the same consequences. 

Meanwhile, polling continues to show that Americans clearly don’t want to start over with a new government-controlled health insurance system and would rather lawmakers build on what’s working today.  A recent poll from Morning Consult and the Bipartisan Policy Center finds that “[i]mproving the current health-care system received the most support among voters, far more than repealing Obamacare or adopting ‘Medicare-for-All,’” Bloomberg reports.

Studies Show That Medicare For All Would Cause American Families To Pay More To Wait Longer For Worse Care.

Medicare for All “would cost more than $50 trillion over 10 years,” Yahoo! Finance reports.  And a recent study from the Urban Institute finds “that federal spending on health care would increase by roughly $34 trillion under a single-payer plan similar to Medicare for All,” CNN reports.  The Committee for a Responsible Federal Budget (CRFB) finds that “fully offsetting the cost would require higher taxes on the middle class” and would “require the equivalent of tripling payroll taxes or more than doubling all other taxes.” 

A new issue brief also warns that one-size-fits-all Medicare for All “could have a significant negative impact on the adequacy of the country’s health care workforce, access to care, and, ultimately, patient outcomes.”  According to the issue brief, “Medicare for All, when fully implemented, could result in a nationwide loss of 44,693 physicians by 2050 relative to current projections.”  Under Medicare for All, “the number of registered nurse graduates will decline by more than 25% and the entire nurse workforce will shrink by 1.2 million registered nurses by 2050 relative to current projections,” according to the issue brief.

• And access to quality care at our nation’s rural hospitals, serving more than 60 million Americans, could also be limited.  FTI’s issue brief adds that “Medicare for All would result in an estimated decrease of 5.4% in the total number of U.S. physicians, a reduction that would be felt most acutely in rural communities already experiencing access challenges. Further, research shows that shortages of healthcare workers in rural areas widen existing health disparities and contribute to hospital closures.”

• The non-partisan Congressional Budget Office (CBO) also warns that a one-size-fits-all government-controlled health insurance system, would “put pressure on the available supply of care … if the number of providers was not sufficient to meet demand, patients might face increased wait times and reduced access to care.”  Recently, the CBO added that “with increased wait times for appointments or elective surgeries, greater wait times at doctors’ offices and other medical facilities, or the need to travel greater distances to receive medical care.  Some demand for care might be unmet.” Economists also warn that Medicare for All could threaten patients’ access to care, POLITICO reports. 

• Experts are also increasingly worried about the “violent upheaval” a Medicare for All system would cause with hospital closures: “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,” The New York Times reports. 

• And a study from the University of Massachusetts Political Economy Research Institute (PERI), shows that “1.8 million health care jobs nationwide would no longer be needed if Medicare for All became law, upending health insurance companies and thousands of middle class workers whose jobs largely deal with them, including insurance brokers, medical billing workers and other administrative employees,” POLITICO reports.  “Nearly 92 percent of these jobs are held by women, and over a third are held by people of color.  And over 80 percent of these workers have less than a four year degree,” The Week adds. 

Studies Show That So-Called “Moderate” Alternatives To Medicare For All – Namely The Public Option, Medicare Buy-In & Medicare For America – Would Ultimately Lead To The Same Consequences.

As The New York Times reported recently, the public option “could be plenty disruptive” and “tilt in the same direction” as Medicare for All.  Eric Levitz of New York Magazine also writes that the public option “would not allow all Americans to ‘keep their private insurance if they prefer it’” and “would guarantee massive disruptions to private coverage.”

This is backed up by the findings of a study conducted by FTI Consulting for the Partnership for America’s Health Care Future, which reveals the public option could eliminate consumer choice for millions of Americans and “eventually cause the elimination of all private plans in the individual market.”  The study finds:

• After the first 10 years of the public option, more than seven million current enrollees would no longer have private coverage through the marketplaces – with two million of those enrollees being forced off their private plans as insurers exit the marketplaces altogether.

• The study also warns that the public option could eventually cause the elimination of all private plans in the individual marketplaces, eliminating choice for millions of Americans, even those with the resources or subsidies available to cover their preferred plan.

• In fact, the report finds that by 2050, 70 percent of state marketplaces (34 U.S. states) would no longer offer a single private insurance option.

• Rural families would be especially hard hit by the public option, the study warns, and could find few if any options available to them.

As The New York Times also reported, the public option “could shake up the private market and also wind up erasing some current insurance arrangements … There’s also the possibility that linking public-option coverage to Medicare could cause some doctors to stop accepting Medicare patients, [Sherry Glied, the dean of the N.Y.U. Wagner Graduate School of Public Service, and a former health official in the Obama administration] said.  That would be another form of politically risky disruption.”Further, The Times explains, the public option “could have effects on employer insurance …[T]he existence of a public option might also induce some employers to abandon private coverage altogether … If it took a lot of market share from private insurers, some might decide to stop selling certain lines of coverage.  Private insurance could disappear from some places, or exist largely to fill certain niches, like high-deductible plans.”

Meanwhile, a study conducted by KNG Health Consulting, LLC for the Partnership reveals that “Medicare for America,” another proposed new government-controlled health insurance system, could force one-third of American workers off of their current employer-provided health care coverage, also known as employer-sponsored insurance (ESI).  And The Wall Street Journal reports that new government-controlled health insurance systems like the public option, Medicare buy-in and ‘Medicare for all who want it,’ represent “stepping stones to single payer.” 

An additional study, conducted by Navigant for the Partnership, 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.”

• A study by KNG Consulting, which was supported by the American Hospital Association (AHA) and the Federation for American Hospitals (FAH), 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.”

• An earlier study by Navigant found that government-controlled health 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.”

An analysis released by the American Action Forum (AAF), finds that a new government-controlled health insurance system known as Medicare Buy-in would cost an additional $184 billion that American families can’t afford.  Even worse, the new system would decrease access to doctors and health care providers by nine percent and would lead to a four percent decrease in medical productivity.

Economists agree, that the public option would burden American families with unaffordable costs.  “The public option would cause premiums for private insurance to skyrocket,” Dr. Scott Atlas of Stanford University writes in The Wall Street Journal.  “A single-payer option is not a moderate, compromise proposal.  Its inevitable consequence is the death of affordable private insurance … Massive taxation would be needed to expand Medicare, whether optionally or not,” Atlas continues.

• The public option “could also lead to a 10 percent increase in premiums for the remaining pool of insured people.” (Reed Abelson, “How A Medicare Buy-In Or Public Option Could Threaten Obamacare,” The New York Times, 7/29/19)

• “[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.” (Reed Abelson, “How A Medicare Buy-In Or Public Option Could Threaten Obamacare,” The New York Times, 7/29/19)

• “[A] government plan that attracted people with expensive conditions could prove costly.” (Reed Abelson, “How A Medicare Buy-In Or Public Option Could Threaten Obamacare,” The New York Times, 7/29/19)

• And a report found that an effort to implement the public option in Colorado, “could imperil thousands of jobs in the health-care industry or take hundreds of millions of dollars out of the state’s economy.” (Ed Sealover, “Colorado Public-Option Insurance Plan Could Cost Health-Care Jobs, Study Argues,” Denver Business Journal, 9/10/19)

Meanwhile, Polling Shows That Americans Don’t Want A New Government-Controlled Health Insurance System And Would Rather Lawmakers Build On What’s Working.

A recent poll from Morning Consult and the Bipartisan Policy Center finds that “[i]mproving the current health-care system received the most support among voters, far more than repealing Obamacare or adopting ‘Medicare-for-All,” Bloomberg reports.  This tracks closely with the second edition of Voter Vitals – a tracking poll conducted nationwide and in 2020 battleground states by Locust Street Group for the Partnership for America’s Health Care Future – which finds that “as voters learn more about new government-run health care proposals, support for them is declining with a majority of voters preferring to build on and improve what we have today rather than start over with Medicare for All or the public option.” 

Other recent national polling backs this up:

• A recent poll released by the Kaiser Family Foundation (KFF) finds “support for a public option is slipping,” POLITICOreports.  The poll also finds that Medicare for All “support wanes when voters hear trade-offs,” Becker’s Hospital Review adds.  Kaiser CEO Drew Altman wrote in Axios that support for Medicare for All is “headed in the wrong direction” – meaning down – while “polling shows that support drops much further, and opposition rises, when people hear some of the most common arguments against Medicare for All.” 

• A national poll from Quinnipiac University, finds that “Medicare for All has grown increasingly unpopular among all American voters,” with a majority saying it’s a “bad idea.” Medicare for Allis “a real problem for … candidates.  Not just because of the cost, but because few swing voters want to dump private health insurance,” Axios adds. 

• And a recent poll from the Kaiser Family Foundation and the Cook Political Report finds that nearly two-thirds (62 percent) of swing voters in the states of Michigan, Minnesota, Pennsylvania and Wisconsin rate Medicare for All as a “bad idea.”

• POLITICO has noted that polls show “growing opposition to ‘Medicare for All’” while a national poll 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.

• 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).”

Meanwhile, a Gallup poll finds that “[s]ome 71% of Americans rate their private coverage as ‘excellent’ or ‘good,’” CNN reports.  “Americans continue to prefer a healthcare system based on private insurance (54%) over a government-run healthcare system (42%),” according to Gallup’s annual Health and Healthcare poll, which finds that a government-controlled health insurance system “remains the minority view in the U.S.  This could create a challenge in a general election campaign for a Democratic presidential nominee advocating a ‘Medicare for All’ or other healthcare plan that would greatly expand the government’s role in the healthcare system.”

An analysis of census health coverage data found that “in eight politically significant counties in Michigan, Wisconsin, and Pennsylvania … 81.3% of those with insurance had private coverage,” theWashington Examiner reports.  A recent poll from the Kaiser Family Foundation and the Cook Political Report finds that nearly two-thirds (62 percent) of swing voters in the states of Michigan, Minnesota, Pennsylvania and Wisconsin rate Medicare for All as a “bad idea.”

A recent report from the University of Virginia’s Sabato’s Crystal Ball finds that “the performance of 2018 Democratic House candidates shows that those who supported Medicare for All performed worse than those who did not,” and warns that “presidential candidates would do well to take heed of these results.”  And 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, they note.

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