10.2.19 / Updates

Explaining The Facts On The ‘Public Option’ And Medicare ‘Buy-In’

We explained last week that when politicians say “Medicare for all,” they are talking about a one-size-fits-all system that would:

  • Slam working families with unaffordable tax hikes.
  • Subject Americans to longer wait times and a lower quality of care.
  • Take away the choice and control Americans enjoy under our current system, where market-based coverage and government programs work together to cover roughly 90 percent of Americans.
  • Push everyone off their current plan, into a single, government-controlled health insurance system run by politicians.

But, when it comes to so-called “moderate” fallbacks – such as the public option, Medicare buy-in and ‘Medicare for all who want it’ – there is a growing consensus that these new government-run health insurance systems are simply “stepping stones to single payer,” as The Wall Street Journal reports – meaning they would lead to the same one-size-fits-all system and the same unaffordable costs to working families.  Along the way, analysts warn, these proposals could lead to higher taxes and premiums, while destabilizing the insurance markets millions of Americans depend on for their coverage.

Journalists, analysts, lawmakers and Democratic presidential candidates alike have acknowledged that these systems are intended to lead to one-size-fits-all Medicare for all:

  • Mayor Pete Buttigieg has emphasized that a “buy-in” or “public option” system “will be a very natural glide path to the single payer environment.” (“2019 Democratic Debates, Night 2: Full Transcript,” The New York Times, 6/28/19)
  • Senator Cory Booker (D-NJ): “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 Booker Confirms: Public Option ‘First Step’ Getting To Medicare For All,” YouTube, 7/22/19)
  • Senator Kirsten Gillibrand (D-NY): “[I]f 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.” (“2019 Democratic Debates, Night 2: Full Transcript,” The New York Times, 6/28/19)
  • 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.” (“Biden Releases Plan To Keep Obamacare,” YouTube, 7/15/19)
  • Dr. Scott Atlas of Stanford University explains, such a system would raise costs for families and “mainly erode, or ‘crowd out,’ private insurance, rather than provide coverage to the uninsured.” (Scott W. Atlas, “Public Option Kills Private Insurance,” The Wall Street Journal, 7/16/19)

News coverage and analysis warns of higher taxes and premiums under the public option or a ‘buy-in’ system:

  • “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 … Massive taxation would be needed to expand Medicare, whether optionally or not.” (Scott W. Atlas, “Public Option Kills Private Insurance,” The Wall Street Journal, 7/16/19)
  • 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 on the state level, a recent report found that implementing 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)

Recent headlines and studies also warn about the severe consequences such a government-controlled health 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 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 reporthospital 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.

  • Another 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.”
  • 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.

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