Expanding Single-Payer Coverage in the United States

How much would our healthcare system change?

Medicare for More of Us: An overview of the various proposals

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You may have heard plenty of references to "Medicare for all" in recent months. But what exactly does that mean? There are a few important points to understand.

There are many proposals under consideration. Some of them are actually called "Medicare for All," but most of them have different names. Although "Medicare for All" is often used to describe the push to expand single-payer coverage in the U.S. (the current Medicare system is an example of a single-payer program), there are a lot of other proposals under consideration, most of which could be described as "Medicare for More of Us."

Some of the proposals call for a switch to a single-payer system for everyone in the United States; others call for a more incremental approach that retains private health insurance at least initially, and some of the proposals would simply allow more people to buy into the existing Medicare or Medicaid systems.

When the word "Medicare" is used in these proposals (e.g., Medicare for All, Medicare for America, Medicare-X Choice Act, among others), it's usually referring to a more robust plan than our current Medicare program.

Single-Payer Health Coverage

The push towards a single-payer health coverage system in the United States has been gaining traction in recent years. It was a non-starter in 2009 when the Affordable Care Act was being debated (even the public option proposal that would have existed alongside private plans was replaced with the CO-OP approach, which proved to be inefficient).

However, some level of increased single-payer coverage is almost certain to be included in the Democratic 2020 platform, and most of the Democrats vying for the 2020 presidential nomination are supportive of at least one of the plans that have been proposed. Republican lawmakers have also introduced various health care reform bills, but none of them focus on an expansion of single-payer coverage, so they are not addressed in this overview).

There is broad public support for increased single-payer coverage, but when there are so many different proposals, it can be tough to know exactly what is under consideration.

That's especially true given the fact that "Medicare for All" is often used as a catch-all phrase to describe the general expansion of single-payer coverage, but it's actually the name used for a couple of the proposals (among many) that are under consideration—and in both cases, the coverage would differ from what current Medicare enrollees receive.

Medicare for More of Us vs. Current Medicare

To avoid confusion, we can say "Medicare for more of us" as a reference to the collection of proposals under consideration. But while many of these plans include the word Medicare in their titles, they're generally calling for more robust coverage than current Medicare enrollees receive.

It's fairly widely understood that the current Medicare program provides coverage for nearly all Americans who are 65 or older, as well as younger people with disabilities. There are plenty of misconceptions about the existing program that people sometimes don't know about until they're ready to transition to Medicare—including the fact that it doesn't cover things like prescriptions, long-term care, or dental care, and doesn't have a cap on out-of-pocket costs (most current Medicare beneficiaries have supplemental coverage to fill in some or all of these gaps).

However, the various "Medicare for more of us" proposals that have been put forth generally call for an enhanced version of Medicare, including things like a cap on out-of-pocket costs (or no out-of-pocket costs at all), coverage for prescriptions, coverage for dental and vision care, coverage for long-term care, and more.

While at least some supplemental coverage is generally a must-have for people who are currently enrolled in Medicare, it wouldn't be needed with some of the expanded "Medicare" proposals being considered.

But there are also proposals that call for allowing more people to enroll in essentially the same Medicare system we have today. In that case, supplemental coverage would still be necessary in order to have full medical coverage.

What Proposals Are Being Considered?

Although most Democratic lawmakers agree on the concept of working towards universal health coverage—often via an expansion of single-payer programs—there isn't yet a consensus in terms of how to get there. Let's take a look at some of the ideas that are currently under consideration.

Medicare for All

"Medicare for All" is often a catchphrase for single payer expansion, but it is really just one end of the spectrum of proposed plans

There are two separate bills that are referred to as "Medicare for All." One bill, S.1129, was introduced in the Senate by Senator Bernie Sanders and is similar to legislation that Sanders introduced in 2017. The other, H.R.1384, was introduced in the House by Representative Pramila Jayapal.

Both proposals call for transitioning the virtually the whole population to a single-payer system without retaining any of our current patchwork of private health coverage plans. Jayapal's proposal includes coverage for institutional long-term care (i.e., nursing home care), which makes it a little more robust than Sanders' proposal. Both proposals call for the elimination of all or most out-of-pocket costs (such as deductibles, copays, and coinsurance), and would also eliminate health insurance premiums since the programs would be funded instead by tax revenue.

Sanders' bill calls for the transition to a single-payer system four years after the bill is enacted, while Jayapal's would transition the population to a single-payer program just two years after enactment.

Takeaway

These Medicare for All solutions are often highlighted in the discussions around expanding single-payer coverage, but there are plenty of other proposals that would take a more incremental approach. The Medicare for All bills are not the only way to go about expanding single-payer coverage, and some advocates worry that the all-or-nothing approach might doom the efforts.

But on the other hand, there are also concerns that a more incremental approach might also damage the efforts (the ACA was seen as an incremental approach towards universal coverage and has been a political lightning rod for a decade).

Medicare for America: An Incremental Approach

In late 2018, the Medicare for America Act was introduced by Representative Rosa DeLauro and Representative Jan Schakowsky. While the Medicare for All proposals described above are designed to transition everyone to a single-payer system, Medicare for America would take a much more incremental approach. The legislation is based in large part on the "Medicare Extra for All" proposal that the Center for American Progress had outlined, and is the approach favored by presidential candidate Beto O'Rourke.

Under Medicare for America, people who have employer-sponsored coverage would be allowed to keep it. About half of the United States population is covered by employer-sponsored plans While the Medicare for All proposals would transition everyone to the new single-payer system, Medicare for America would make that optional. Large employers would have the option to offer high-quality private health insurance or to shift their employees to the Medicare for America program and pay 8 percent of payroll to the Medicare Trust Fund.

How Does This Change Medicare?

The legislation would improve the existing Medicare program by adding coverage for prescription drugs, dental and vision care, and long-term care, and it would also implement a cap on out-of-pocket costs ($3,500 for an individual and $5,000 for a family). The legislation that was introduced in late 2018 included a cap on Medicare for All premiums equal to 9.66% of a household's income, although a revised version of the bill is expected to call for a premium cap equal to 9% of household income.

The current Medicare population would remain covered by the improved Medicare program. In addition, everyone currently enrolled in Medicaid and marketplace plans (i.e., Obamacare plans) would be transitioned to the improved Medicare program.

All newborns would be automatically enrolled in the program, too, so enrollment would grow over time, gradually shifting the population to a "Medicare for All" model. But premiums and out-of-pocket costs are part of the Medicare for America model, so it doesn't go as far as the current Medicare for All proposals in terms of overhauling our health insurance system.

Public Option in the ACA Marketplaces

When the ACA was being debated, there were lawmakers who wanted to include a public option that would be sold alongside the private plans in the marketplace, but that idea was discarded very early on due in large part to opposition from the insurance lobby.

Medicare-X Choice Act of 2019

The Medicare-X Choice Act of 2019 would revive the public option idea. S. 981, introduced by Senators Michael Bennet and Tim Kaine, and H.R. 2000, introduced in the House by Representative Antonio Delgado, would create a new public option plan called Medicare-X. The plan would be rolled out in stages—it would be available initially to people in areas where private plan options are limited and/or expensive, but eventually available to all non-incarcerated legal United States residents who aren't eligible for the existing Medicare program. Small businesses would also be able to purchase Medicare-X for their employees.

Medicare-X would follow the same guidelines as ACA-compliant individual and small group plans, with coverage for the ACA's essential health benefits, and a cap on out-of-pocket costs.

Premium subsidies could be used to purchase the coverage, and the legislation would also enhance the current premium subsidy model by extending subsidies to people with income above 400% of the poverty level and providing stronger subsidies to people with lower incomes. Although this proposal is called Medicare-X, it would be separate from, and would not change anything about, the current Medicare program.

Keeping Health Insurance Affordable Act of 2019

Another bill, the Keeping Health Insurance Affordable Act of 2019, would also create a public plan that people could purchase, although it would not be available for employers to purchase. The legislation (S.3) was introduced by Senator Ben Cardin. The public plan would be made available only through the health insurance exchange in each state, with coverage following the guidelines for metal-level plans and essential health benefits. The ACA's premium subsidies could be used to offset the price of the public option plan, and the legislation would also extend premium subsidies to people earning up to 600% of the poverty level.

In addition, the bill would increase the actuarial value of health plans sold to people with income up to 400% of the poverty level (i.e., benefits would be more robust), and calls for some marketplace stability provisions, including a permanent reinsurance program. The Keeping Health Insurance Affordable Act would also allow the federal government to negotiate prescription drug costs for the existing Medicare program.

Buying Into Medicare and Medicaid

Medicare and Medicaid are both government-run health care systems, although Medicaid is not technically a single-payer system since it's jointly funded by the federal and state governments. (Medicare is funded by the federal government, so it is a single-payer system.)

Many proponents of expanded single-payer coverage have focused on the idea of increasing the number of people who have Medicaid or Medicare by giving people the option to buy into those programs.

Both Medicare and Medicaid have fairly strict eligibility rules; under the current system, you can't just opt to buy coverage under either program if you're not in their limited eligibility categories.

But several states have begun considering the possibility of allowing people—who are not eligible for income-based Medicaid coverage—to buy into their Medicaid programs. No states have sorted out the details of this yet, but if they did, it would most likely also require federal approval since Medicaid is jointly run by the state and federal governments.

State Public Option Act

As the federal level, Senator Brian Schatz and Representative Ben Ray Lujan have introduced legislation (S.489 and H.R.1277, known as the State Public Option Act) that would allow any state to expand its Medicaid program to allow residents the option to purchase Medicaid coverage instead of private health insurance, with premiums capped at no more than 9.5% of enrollees' household income. Legislation like this would open the door for more state innovation with regards to Medicaid buy-in since the federal permission would already exist.

Medicare is fully run by the federal government, and legislation has also been introduced that would allow people to buy into Medicare as an alternative to private health coverage.

Some of the bills would limit this to people age 50 and older, but legislation has also been introduced that would allow anyone, including employers, to purchase Medicare coverage.

Medicare at 50 Act and the Medicare Buy-In

Senator Debbie Stabenow and Senator Jeanne Shaheen have introduced the Medicare at 50 Act (S.470). And a similar bill, the Medicare Buy-In and Health Care Stabilization Act of 2019 (H.R.1346), was introduced in the House by Representative Brian Higgins. Both bills would allow people to buy into Medicare at age 50 (currently, people are only eligible to enroll in Medicare prior to age 65 if they're disabled).

Both bills would retain Medicare Parts A, B, and D, and would give enrollees the option of enrolling in Medicare Advantage, just as it's available to current Medicare enrollees. Under both bills, Medicare would continue to have uncapped out-of-pocket exposure (unless the enrollee selects a Medicare Advantage plan since those are already required to cap out-of-pocket spending).

Choose Medicare Act

Another bill called the Choose Medicare Act, introduced in April by Senators Jeff Merkley and Chris Murphy, would allow anyone to buy into Medicare regardless of age and would also cap out-of-pocket costs for Medicare enrollees, including those currently eligible for the program. The legislation would create a new Medicare plan (Medicare Part E) that would be available for purchase in the ACA marketplaces (exchanges). The plan would also be available for employers to offer to their employees instead of private health insurance.

Although current Medicare premiums are heavily subsidized by the federal government, that would not be the case for the buy-in population under any of these proposals.

Premiums would be averaged across the buy-in population (people wouldn't pay more due to having a high-cost medical condition), but they would be set at an amount that covers 100% of the cost of benefits and administrative costs.

The Medicare at 50 Act has been cosponsored by several notable Senators, including a few who are vying for the Democratic presidential nomination (Kirsten Gillibrand, Kamala Harris, Cory Booker, and Amy Klobuchar). Gillibrand, Harris, and Booker are also cosponsors of the Choose Medicare Act.

Allowing younger people the option to buy into Medicare could be an attractive alternative for early retirees and self-employed people who earn too much for the ACA's premium subsidies but find themselves facing the particularly high individual market premiums that apply to private individual market enrollees in the years before they turn 65.

Medicare and Medicaid pay doctors and hospitals less than private insurers do, which helps to keep premiums lower. But those lower reimbursement rates are also part of what makes these buy-in proposals controversial, as there are concerns that an influx of enrollees might drive providers away from participation in the lower-paying Medicaid and Medicare programs.

Overview

At this point, it's too early to say which of these proposals will rise to the top. Some aspects of at least some of them are likely to be included in the 2020 Democratic Party platform. However, the current proposals run the gamut from simply allowing people to buy into the current Medicare program a few years early, to transitioning the whole country to a single-payer system that covers 100% of medical costs with tax revenue (i.e., no premiums or cost-sharing).

In general, the more robust a proposal is, the more it would cost. But there are tradeoffs there too: the Medicare for All proposals would require significant tax increases, but individuals and employers would no longer have to pay health insurance premiums, deductibles, copays, or coinsurance, which would result in considerable personal savings.

Reducing Total Healthcare Spending

One of the primary aims of any expansion of single-payer coverage is to reduce total health care spending in the United States since we spend a lot more than any other country, and our outcomes lag behind those of many other countries.

However, that's a complicated goal in and of itself, which will be met with fierce pushback from the industries that currently profit from our health care system—and this goes well beyond the obvious health insurers—it includes hospitals, too.

Although numerous bills have been introduced in recent months, none of the proposals to expand single-payer coverage are likely to gain traction until at least 2021. Republicans currently control the White House and the Senate, where Majority leader Mitch McConnell has expressed strong opposition to the idea of "Medicare for All."

Rather than an expansion of single-payer coverage, GOP lawmakers tend to take the opposite approach, favoring an expansion of private health insurance—including a push towards more Medicare Advantage coverage for the existing Medicare population. So the future of healthcare reform, and the viability of "Medicare for more of us" depends in large part on the outcome of the presidential and congressional elections in 2020.

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