Voters Don’t Want To Start Over With A One-Size-Fits-All Government Health Insurance System We Can’t Afford

MEMORANDUM

TO: Interested Parties
FROM: Lauren Crawford Shaver, The Partnership for America’s Health Care Future
RE: Voters Don’t Want To Start Over With A One-Size-Fits-All Government Health Insurance System We Can’t Afford
DATE: March 14, 2020

As health care remains at the top of voters’ minds, there’s no doubt the issue will play a prominent role in tomorrow’s presidential debate.  But as the unaffordable costs and negative consequences of new government-controlled health insurance systems become clearer, more Americans are urging candidates to focus on building on what’s working and fixing what isn’t – not starting over with a one-size-fits-all system controlled by politicians. 

In Michigan, “the idea of giving up health care plans they negotiated for in favor of a government-controlled system that guarantees coverage for everyone” proved highly controversial among members of labor unions, The Detroit News reports.  “[P]rivate health insurance coverage is something unions have fought for and don’t want to give up, according to those who work with businesses in the state,” Forbes adds.  And in Florida, Medicare for All is “sparking controversy among retirees in the all-important battleground state,” Fox Business reports. 

The just-released 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 a “supermajority of voters prefer to build on and improve our current health care system rather than replace it with something new.”

Medicare For All Would Cause American Families To Pay More To Wait Longer For Worse Care As They Are Forced Into A One-Size-Fits-All New Government Health Insurance System Controlled By Politicians.

At the end of the day, “Medicare for all would be an enormous expansion of government spending, and would almost certainly require large tax increases,” The New York Times reports.  A 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 Medicare for All “alone would leave a $13 trillion hole in the federal budget,” NBC News reports.  

The CRFB also adds 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.”  Senator Sanders previously acknowledged that Americans making more than $29,000 per year would “pay more in taxes” for Medicare for All.

• “No matter how you cut the numbers, there is absolutely no way to pay for Medicare for all without tax increases – or spending cuts – on the middle class,” Marc Goldwein of CRFB told POLITICO.  “There’s no question it hits the middle class,” Kenneth Thorpe, Chairman of the Health Policy and Management Department, Emory University told The Washington Post.
   
• “Although [Medicare for All’s supporters] have frequently stressed that the middle class would see overall costs go down, a wide range of experts … say it is impossible to make those guarantees based on the plans that the candidates have outlined so far … ‘It’s impossible to have an ‘everybody wins’ scenario here,’ said Kenneth Thorpe, chairman of the health policy department at Emory University … ‘There’s no question it hits the middle class,’ he added.  John Holahan, a health policy expert at the nonpartisan Urban Institute agreed: ‘Even though high-income people are going to pay a lot more, this has to hit the middle class.’… ‘Most of the proposals to move to Medicare-for-all would involve substantial tax increases that would affect most people,’ said Katherine Baicker, an economist at the University of Chicago who specializes in health policy.  ‘These are going to be big tax increases.’ … ‘I think it seems likely under most proposals taxes would have to go up substantially unless you dramatically cut the health care you’re getting,’ she added,” The Washington Post reports. 
   
• And, “economists say that most taxpayers would pay more in taxes than they would save from having the federal government absorb the cost of health-care premiums,” The Post also reports.  Additionally, “71% of households with private insurance would wind up paying more than they would under the current system,” Kenneth Thorpe, chairman of the health policy and management department at Emory University, told The Wall Street Journal.

And a recent analysis from Penn Wharton reveals that Medicare for All “could decimate the economy,” the Washington Examiner reports.  According to the new analysis, Medicare for All “could reduce commerce by as much as a quarter over time,” the Examiner adds.

Efforts to create new government-controlled health insurance systems have also largely failed on the state level due to the unaffordable costs. The Wall Street Journal reports that efforts to implement a similar government-controlled health insurance system on the state level “haven’t ended well,” as the “final numbers were too high to sell” taxpayers.

• The New York Times editorial board acknowledged that “[i]n Vermont and Colorado, legislators dropped bids for a state-run single-payer system when it became clear that people would not support the tax increases needed to sustain such a program.”
   
• Vermont’s Democratic governor admitted that the 11.5 percent payroll tax and 9.5 percent income tax that were proposed to finance the system were too much for taxpayers to accept: “‘The biggest problem was money,’ Shumlin said at Harvard. And he couldn’t promise lawmakers that they wouldn’t need to hike taxes again later to accommodate rising health care costs.” 
   
• The Washington Post reported 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.”

A recent issue brief from FTI Consulting 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 new government 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. 

New Government-Controlled Health Insurance Systems – Namely The Public Option And Medicare Buy-In – Are Not “Moderate” Alternatives To Medicare For All And Would Ultimately Lead To The Same Unaffordable Consequences Over Time As Medicare For All Would Cause Overnight.

As PolitiFact reported recently that “introducing a public option … could create more incentives for employers to drop private coverage and switch to the public Medicare plan – and, in some cases, for private carriers to exit the individual marketplace.”  And The New York Times added, 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.”

And a study by Tom Church, Daniel L. Heil, and Lanhee J. Chen, Ph.D. of the Hoover Institution with support from the Partnership for America’s Health Care Future reveals that 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.”  The study finds:

• The public option could require a new 4.8 percent payroll tax on American families over 30 years – far higher than the combined Medicare payroll tax Americans pay today.
   
• 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.
   
• 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 control of a new government health insurance system could lead to higher costs and tax burdens for American families.
   
• The public option could add as much as $700 billion to the federal deficit in its first 10 years.

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)

And, 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.

As Chris Pope, a senior fellow at the Manhattan Institute sums up in National Review, “[t]he more a public option is able to achieve the increases in coverage and benefit generosity promised by single-payer, the more it is likely to yield the associated disadvantages of tax increases or cutbacks in access to quality medical services.”

Meanwhile, The Latest Polls Demonstrate That Americans Oppose One-Size-Fits-All New Government Health Insurance Systems When They Learn The Consequences And Would Rather Build On What’s Working.

New polling shows that “voters seem to be unclear about what [Medicare for All] would do, especially regarding the employer-provided insurance that already covers some of them,” Yahoo! Finance reports.  But polling shows that when Americans learn about the unaffordable costs and negative consequences associated with one-size-fits-all new government health insurance systems, support drops.  “Majority support for Medicare for All flips to majority opposition – 58% – if people think it would eliminate private coverage.  And opposition rises to 70% if people think Medicare for All would lead to delays in care,” Axios reports.  “The bottom line is that voters have a poor understanding of Medicare for all, and those who understand it best don’t like it,” Yahoo! Finance adds.  

• Previous polling has made this clear.  A national poll conducted last 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,recent polls in the swing states of Pennsylvania, Michigan and Wisconsin from Third Way “reveal that voters are deeply skeptical about Medicare for All” and “think Medicare for All will lead to middle-class tax hikes and lower quality of care.”  This tracks closely with another 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.”  In fact, The Wall Street Journal reports that in Michigan, “supporters of a single-payer health care system are finding a tough audience.”

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.  And 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 a “supermajority of voters prefer to build on and improve our current health care system rather than replace it with something new.” 

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.”