MEMO: Key Background On Medicare For All & So-Called “Moderate” Fallbacks

MEMORANDUM

To: Interested Parties
From: Lauren Crawford Shaver, Partnership for America’s Health Care Future
Re: Key Background On Medicare For All & So-Called “Moderate” Fallbacks
Date: June 25, 2019

When Democratic presidential candidates take the debate stage in Miami this week, America’s health care future is likely to be a major topic of discussion.  As The Washington Post reports, “[v]oters have plenty to sort out, with nearly two dozen Democrats running, each offering a raft of proposals on many issues.  But in public opinion surveys and interviews, people rank health care as their top concern.”

However, by embracing a one-size-fits-all system such as Medicare for all, or stepping stones to Medicare for all that will ultimately cause the same harmful outcomes, such as “buy-in” or “public option” systems, 2020 White House hopefuls are missing the mark.

“According to pollsters, policy analysts and political strategists, the candidates’ emphasis on Medicare expansion plans is partly a missed opportunity and partly a reflection of the slice of the electorate that participates in Democratic primaries,” The Post notes.  Plus, “polling suggests people have little understanding of what Medicare-for-all would mean.”

To provide some much-needed clarity to the conversation, below is some key background on Medicare for all and so-called “moderate” fallback proposals.

Americans Don’t Know What ‘Medicare For All’ Means & They Don’t Like It Once They Find Out:

New national polling data by the Kaiser Family Foundation reveals 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.”

• As POLITICO reports, “[m]any Americans have fundamental misconceptions about ‘Medicare for All,’ such as believing it would be optional or they could keep their private insurance, new polls find … One big mistake: 55 percent of respondents mistakenly believe that people with private insurance would be able to keep their current arrangement under Medicare for All … The poll also found that just 1 in 5 Americans were very confident they know what ‘Medicare for All’ would mean for our health care system or their personal health care.”
• 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 notes, “[t]he survey finds eight in 10 Americans (78%) are aware that taxes would increase for most people under such a plan.”

The American public’s confusion over the negative effects of 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.”

• A former Washington bureau chief for The Dallas Morning News, meanwhile, points out the “retreat by others [in the 2020 Democratic field] from stressing the more liberal policy positions Sanders has championed, like Medicare for all…”  Examples of this include efforts by Senator Kamala Harris (D-Calif.) and Senator Cory Booker (D-N.J.) to explain their simultaneous support for Medicare for all, with their claim that they do not favor eliminating private coverage, something Senator Bernie Sanders (I-Vt.), the bill’s author, readily acknowledges is a central tenet of the proposal.

Why have some presidential hopefuls who support Medicare for all backed away from discussing the details of how the plan would work?

• Polling shows that most Americans oppose Medicare for all once they know what it is.  A national poll conducted earlier this year by the Kaiser Family Foundation 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, as CNN notes, the new Kaiser poll finds that Medicare for all doesn’t rank among Democratic and Democratic-leaning independent voters’ top health care priorities: “Medicare for All is one of the health care proposals being championed by progressive Democrats, including Sanders and others running for the nomination, though it has caused fissures within the party.  Top congressional Democrats have committed to defending the Affordable Care Act, which is under assault in the courts from an alliance of Republican-led states, as well as the Trump administration.  Democratic politicians have made health care a major part of their campaigns, and that’s in line with the priorities of Democrats and Democratic-leaning independents.  Some 87% say it’s ‘very important’ for candidates in the upcoming debates to discuss the topic, topping a list that includes women’s issues, climate change, gun policy and income inequality.  Implementing a Medicare for All-type system, however, doesn’t rank as high when looking at health care topics.  Some 28% of respondents want to hear how the candidates would lower the amount people pay for health care and another 18% want them to discuss increasing access to care.  Medicare for All comes in at 15%, just below protecting the ACA and protections for those with pre-existing conditions.”
  • A previous national survey by Kaiser also found that most Democrats and Democratic-leaning independents “say they want Democrats in Congress to focus their efforts on improving and protecting the ACA,” not pursuing Medicare for all.
    • Related: “The ‘Medicare for All’ push is hitting serious obstacles in the U.S. House in the face of resistance from Democratic leaders concerned that replacing the private insurance system would generate backlash from voters who like their coverage,” and “the effort appears unlikely to go much further” as the legislation “hasn’t gained much support since its release in February,” Bloomberg reports.  Assessing the extent to which Senator Bernie Sanders’s (I-Vt.) agenda is “stalled,” The Washington Post notes that “[o]ne of his trademark proposals – Medicare-for-all – has attracted fewer co-sponsors in Congress than two years ago.”  And POLITICO reports that “House Democratic leaders, who worry Medicare for All could hurt the party with moderate voters, have allowed hearings on the plan, but they haven’t committed to floor votes.”
    • Also Related: While Medicare for all would eliminate the popular Medicare Advantage program, along with employer-provided and other private coverage, Bruce Japsen writes at Forbes that new data from the Kaiser Family Foundation show that “[s]eniors in progressive U.S. states are choosing private Medicare Advantage plans more so than the national average even as the politicians who want to represent them talk about getting rid of the insurer’s role in health coverage … The move toward privatized Medicare plans in Democratic-leaning states like these comes as many candidates for the party’s nomination for President are pushing a single payer version of ‘Medicare for All’ that would bring an end to the private insurer’s role.”

Medicare For All Would Force Americans To Pay More To Wait Longer For Worse Care:

Independent analysts estimate the cost of Medicare for all could be as high as $60 trillion over 10 years, and the nonpartisan Committee for a Responsible Federal Budget (CRFB) finds that even a low-end estimate of $30 trillion over a decade “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.”

• 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 calling out Senator Bernie Sanders’s “misleading” rhetoric, fact-checkers for The Washington Post note that “[a]ccording to a study from the Urban Institute (and a follow-up paper), Medicare-for-all would still add $32.6 trillion to national health spending over 10 years.  The study goes on to state that Sanders’s proposed tax increase would be insufficient and that additional revenue would be needed.”
  • As CNN reports, “[t]ax experts, however, 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 … Sanders hasn’t provided a comprehensive analysis of how much the plan … will cost or how he will pay for it … ‘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.’”
  • “There’s no possible way to finance [Medicare for all] without big middle class tax increases,” CRFB’s Marc 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.”
    • 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.”
• The Washington Post’s fact-check also notes 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.”

So-Called “Moderate” Fallbacks – Like “Public Option” & “Buy-In” – Would Ultimately Cause The Same Results:

As Medicare for all “falters,” some 2020 presidential hopefuls (ex. – Vice President Biden, Senator Bennet, Senator Klobuchar, and former Rep. O’Rourke) are embracing so-called “moderate” fallback proposals– often branded “public option” or “Medicare buy-in.”  In reality, these proposed government insurance schemes would ultimately lead to the same result Americans reject: a one-size-fits-all health care system run by Washington.

• 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-Conn.), 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.”
• Recent studies provide dire warnings about the ways a new government insurance system would harm providers and patients.  One study 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.”  Another study 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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