Americans Deserve Access To Quality Coverage Options; Let’s Strengthen What’s Working, Not Start Over

MEMORANDUM

TO: Interested Parties
FROM: Lauren Crawford Shaver, The Partnership for America’s Health Care Future
RE: Americans Deserve Access To Quality Coverage Options; Let’s Strengthen What’s Working, Not Start Over 
DATE: August 24, 2020

Today, more than ever, Americans deserve access to affordable, high-quality health coverage and care.  And as health care remains at the top of voters’ minds, there’s no doubt the issue will play a prominent role during this week’s Republican National Convention (RNC).  Unfortunately, some politicians are proposing a one-size-fits-all new government health insurance system called the public option that could have negative consequences for hardworking Americans, including higher costs and less access to quality care.

In fact, a recent report released by FTI Consulting and the Partnership for America’s Health Care Future found that if a new government-controlled health insurance system called the public option had been implemented before the COVID-19 crisis, it could have exacerbated stresses on the current health care system and left many Americans worse off. 

Today, our nation’s hospitals are strained by the crisis and projected to lose $49.6 billion in revenue.  The public option could worsen the strain on our hospitals by 60% to $79.2 billion, threatening access to high-quality care for tens of millions of Americans.  Specifically, the financial impact of the public option could limit hospital resources to expand intensive care units (ICUs), procure supplies, and enhance staffing.

As the negative consequences of the public option become clearer, policymakers should instead focus on building on what’s working where private coverage, Medicare, and Medicaid work together – not starting over with a one-size-fits-all government health insurance system controlled by politicians. 

As America’s Health Care Leaders Are Working Together To Overcome COVID-19, Millions Of Americans Have Access To Affordable, High-Quality Health Coverage And Care Through Existing Private Plans And Public Programs:

While millions of Americans are grappling with the challenges posed by COVID-19, the current health care system is providing a safety net for those who need access to health care coverage.  In fact, 79 percent of Americans who are newly uninsured are eligible for publicly-subsidized coverage.

• Monthly premiums for coverage on the health insurance marketplaces were down three percent during this year’s enrollment period compared to 2019. (Centers for Medicare & Medicaid, 4/1/20)
• At least 8.4 million Americans are eligible for marketplace subsidies this year and that number will increase to 12.4 million by 2021. (Kaiser Family Foundation, 5/13/20)
• The health insurance marketplaces will be an important safety net for newly unemployed Americans. (Axios, 4/15/20)
• Of the 27 million Americans estimated to lose their ESI following job loss, 19 million are estimated to maintain coverage through the employer of a working spouse or parent. (Kaiser Family Foundation, 5/13/20)
• Since the start of the COVID-19 crisis in March, nearly 162,000 people have enrolled in health care coverage through the state-based marketplaces in 10 states and Washington, D.C. (The Commonwealth Fund, 5/19/20)
• 11 states and Washington, D.C. are offering Special Enrollment Periods (SEPs) to ensure access to health care coverage. And while not all Americans are residents of a state that offered a SEP, Healthcare.gov allows for enrollment outside of the annual-open period, which is triggered by the loss of minimum essential coverage. (The Commonwealth Fund, 5/19/20)

While marketplaces provide Americans with access to affordable plans, programs such as Medicaid and the Children’s Health Insurance Program (CHIP) are also helping American families maintain coverage.

• 12.7 million Americans are eligible for Medicaid, and that number will grow to 17 million by 2021. Health Management Associates estimates Medicaid enrollment could increase by 5 to 18 million Americans by the end of 2020, depending on the economy. (Kaiser Family Foundation, 5/13/20; Health Management Associates, 5/19/20)
• Nearly 7 million children whose parents lose their insurance through their employer will be eligible for coverage through Medicaid or CHIP. (Kaiser Family Foundation, 5/13/20)

The Public Option Is Not A “Moderate” Alternative To Medicare For All And Could Ultimately Lead To The Same Negative Consequences Over Time As Medicare For All Would Cause Overnight: 

Unaffordable Costs & Tax Hikes On American Families:

• The public option “could require tax increases on most Americans, including middle-income families” and could “add over $700 billion to the 10-year federal deficit, with dramatically larger losses in subsequent years.” (Tom Church, Daniel L. Heil & Lanhee J. Chen, Ph.D., Hoover Institution, 1/24/20)
• A politically realistic public option could lead to a new 4.8 percent payroll tax on American families, which would eventually cost the average American worker about $2,300 per year in higher taxes – far higher than the combined Medicare payroll tax Americans pay today. (Tom Church, Daniel L. Heil & Lanhee J. Chen, Ph.D., Hoover Institution, 1/24/20; “Usual Weekly Earnings Of Wage And Salary Workers,” Bureau Of Labor Statistics, U.S. Department Of Labor, Accessed 2/3/20)
• Over 30 years, the public option would become the third most expensive government program behind only Medicare and Social Security – both of which are at risk for the seniors who rely on them. (Tom Church, Daniel L. Heil & Lanhee J. Chen, Ph.D., Hoover Institution, 1/24/20)
• The public option could add as much as $700 billion to the federal deficit in its first 10 years. (Tom Church, Daniel L. Heil & Lanhee J. Chen, Ph.D., Hoover Institution, 1/24/20)
• While proponents try to claim the public option could reduce costs by reimbursing providers at Medicare rates, recent history at both the federal and state levels demonstrates that putting politicians in charge of a new government-controlled health insurance system could lead to higher costs and tax burdens for American families. (Tom Church, Daniel L. Heil & Lanhee J. Chen, Ph.D., Hoover Institution, 1/24/20)

Eliminating Consumer Choice & Control:

• The public option could eliminate consumer choice for millions of Americans and “eventually cause the elimination of all private plans in the individual market.” (FTI Consulting, 11/18/19)
• After the first 10 years of the public option, more than seven million Americans with private coverage could no longer have coverage through the marketplaces – with two million of those enrollees being forced off their private plans as insurers exit the marketplaces altogether. (FTI Consulting, 11/18/19)
• 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. (FTI Consulting, 11/18/19)
• In fact, the report finds that by 2050, 70 percent of state marketplaces (34 U.S. states) could no longer offer a single private insurance option. (FTI Consulting, 11/18/19)
• Rural families could be especially hard hit by the public option, the study warns, and could find few if any options available to them. (FTI Consulting, 11/18/19)

Reducing Patients’ Access To Quality Care:

• Already operating under razor-thin margins, the public option could increase revenue losses for hospitals in rural and underserved communities by more than 40% – threatening access to affordable, high-quality care. (FTI Consulting, 8/13/20)
• Nationwide, America’s hospitals and health care providers could face a 60% increase in revenue loss, which would hurt the nation’s ability to respond to the next public health crisis. (FTI Consulting, 8/13/20)
• “For 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.” (KNG Consulting, 3/12/19)

Polling Shows Support For Building On What’s Working in Health Care: 

• The third 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 – finds that “72% of voters are unwilling to pay any more for health care and 66% are unwilling to pay any more in taxes for universal coverage,” and a majority of Americans do not support one-size-fits-all government-controlled health insurance while a supermajority of Americans (66 percent) prefer to build on our current health system rather than replace it with something new (34 percent).  
• Meanwhile, “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.”
• And a recent survey by the University of Chicago Harris School of Public Policy and The Associated Press-NORC Center for Public Affairs Research, finds that Americans “are still more likely to prefer the private sector than the government on driving innovation in health care, improving quality and … providing coverage,” The Associated Press reports.
• Additionally, Gallup finds that the vast majority of Americans with private coverage rate their health care coverage (71 percent) and quality (79 percent) as ‘excellent,’ or ‘good.’