Medicare for All Still Unpopular

 

Medicare for All has been unpopular for the last 40 years – and it’s still just as unpopular. That’s the message from healthcare industry analyst Robert Laszewski.

Laszewski, in his Healthcare Marketplace and Policy Review, reminds us that President Jimmy Carter ran on a Medicare for All platform in 1976. But despite having Democratic majorities in the House and Senate, a filibuster-proof 61 seats in the Senate and an overwhelming 292 seats in the House, Carter was unable to convince his own party to approve Medicare for All.

The same thing happened in 1993 during the Clinton presidency. The Democrats then controlled majorities in both houses of Congress, 57 seats in the Senate and 258 in the House, but only about half of these were in favor of a single-payer healthcare system.

Fast forward to 2009 during the Obama administration. Though President Obama, House Speaker Nancy Pelosi, and Senate Majority leader Harry Reid all favored single-payer healthcare, they couldn’t convince a majority of their own party to proceed forward with a complete government takeover of healthcare. Instead, they pushed through the Affordable Care Act (ObamaCare), without a single Republican vote, as a compromise to their own party.

Laszewski says not much has changed today. As of September, 2019, only about half of the Democratic caucus (118) supports Medicare for All. The other half supports strengthening ObamaCare. The Democratic presidential candidates all seemed to favor Medicare for All in the early campaign debates but some are modifying their position lately to favor stronger support of ObamaCare.

However, new front-runner Elizabeth Warren still strongly supports Medicare for All as does its founder, Bernie Sanders. Only Joe Biden favors strengthening ObamaCare among the leading candidates.

Laszewski explains, “Maybe most telling, Democratic House Speaker Nancy Pelosi recently said, “God bless the 2020 Democratic presidential candidates putting forth Medicare for all proposals, but know what that entails. I believe the path to ‘health care for all’ is a path following the lead of the Affordable Care Act. Let’s use our energy to have health care for all Americans — and that involves over 150 million families that have it through the private sector.”

Pelosi is savvy enough to understand that eliminating private employer-provided healthcare for over 150 million Americans is a losing proposition.

Moreover, that proposal flies in the face of a major Democratic constituency – labor unions. It is a major function of labor unions to negotiate healthcare insurance benefits for employees with their major corporate employers. Eliminating private health insurance will eliminate a major reason for the existence of labor unions. If there is one thing that labor unions care more about than anything it is their continued existence.

Lastly, even The Washington Post, a major supporter of liberal and Democratic causes, believes Medicare for All is a big mistake. Here is an excerpt from a recent editorial:

On the wildly unrealistic side is Mr. Sanders’s plan, which Sen. Elizabeth Warren (Mass.) also supports. Mr. Sanders would eliminate private insurance and enroll everyone in a government-run plan that is, in fact, far more generous than Medicare. Even if Americans wanted to give up their private insurance, Mr. Sanders’s plan to eliminate premiums, co-payments and other cost-sharing, while offering Americans a massive suite of free benefits, would either be unimaginably expensive or force unsustainably huge cuts in payments to doctors and hospitals. Mr. Sanders points to other countries with “single-payer” systems to prove that building one in the United States is possible. In fact, other nations are far less generous than what Mr. Sanders proposes.

With Joe Biden dropping rapidly in the polls and others like Elizabeth Warren and Bernie Sanders rising, Democrats should be nervous about a presidential campaign platform that includes Medicare for All.

ObamaCare Winners and Losers – 6 Years Later

 

Six years ago this October Americans began signing up for the Affordable Care Act, a new healthcare system passed by Democrats under President Obama and destined to be forever known by his name, ObamaCare. How well has it achieved its objectives?

ObamaCare was supposed to provide universal healthcare coverage. At the time of its passage, about 84% of Americans had healthcare coverage. Although Obama said often his bill would cover everybody, the White House later admitted that coverage of 95% of Americans was what they considered realistic.

The U.S. Census Bureau says 91.5% of Americans had health insurance in 2018, the latest data available. This is actually down from the 92.1% with coverage in 2017. The decline in coverage was 0.7% in those enrolled in Medicaid. Private coverage was unchanged.

Six years later there are about 12 million more Americans on Medicaid now than before ObamaCare. Many of these were previously covered by private health insurance but when they became eligible for Medicaid under the ObamaCare expansion guidelines, they dropped their private plans and enrolled in Medicaid. In other words, they stopped paying for their own health insurance and let the taxpayers pay for their coverage.

ObamaCare has been generally good for the poor, especially those who previously earned too much to qualify before the new eligibility rules. Those Americans now are either eligible for Medicaid or eligible for large government subsidies to purchase private health insurance on the ObamaCare exchanges. For these people, ObamaCare has provided coverage, albeit in plans with poor access to healthcare like Medicaid and ObamaCare exchange plans.

But for those in the middle class who earn too much to qualify for government subsidies, ObamaCare has resulted in high premiums and high deductibles that many have considered unaffordable or not worth the expense. They’d rather go without insurance than pay high prices for healthcare coverage they don’t need. This has significant ramifications for the insurance market as a whole.

According to health insurance industry analyst, Robert Laszewski, only 40% of the individual market is insured because the costs are too prohibitive. Laszewksi explains how this impacts the market:

“Given the unattractiveness of the ObamaCare individual market policies, we never had more than 40% of the subsidy eligible sign-up for coverage (75% are needed for a balanced and efficient risk pool) leading to very expensive policy premiums and a cycle of ever higher premiums driving out even more of the unsubsidized who could no longer afford the premiums and deductibles – family plans costing $15,000 to $20,000 a year with $7,000 individual deductibles were not uncommon.”

On the winning side are the private insurance companies. Insurance companies have raised their rates since the subsidies insulate those people from the higher premiums and deductibles. The highly subsidized don’t feel the impact – the taxpayers do. In fact, the insurance industry will pay out $800 million in consumer rebates this year because they exceeded maximum profit limitsunder the law. Hospitals are also benefiting from the expansion of Medicaid and the increase in coverage of the poor under ObamaCare.

Insurance companies also profit from the Medicaid expansion under ObamaCare because two thirds of Medicaid beneficiaries (54 million) are now enrolled in private Medicaid contracts with $300 billion in Medicaid money paid through health insurers. This is an increase from only 60 billion ten years ago, before ObamaCare.

Losers are anyone who doesn’t qualify for government subsidies for their health insurance. Many of these cannot afford private insurance coverage if it is not provided by their employer. But even those who get their insurance through their employer are losers because the rising costs of these policies is hurting the profits of their employers and preventing them from wage increases they should be getting if not for these rising healthcare costs. For some, the increase in business expenses leads to failure of the business and the loss of their jobs.

In summary:

  • ObamaCare Winners
    • Very poor and poor Americans
    • Private insurance companies
    • Hospitals
  • ObamaCare Losers
    • Middle class Americans
    • Upper class Americans
    • All Taxpayers
    • Employers and employees

The Biden Plan Has Already Failed

 

As Democratic presidential candidates debate their healthcare plans, one of those plans has already been tried – and failed. I’m speaking of the Biden plan, better known as ObamaCare.

Biden has resisted the progressives move to Medicare for All, doubling down instead on Obama’s plan, The Affordable Care Act. Like most legislative names, this one cannot live up to its billing. It has become increasingly unaffordable for everyone except those who get generous government subsidies.

Former Vice-President Biden plans to “protect and build on the Affordable Care Act.” Brian Blasé, writing in The Wall Street Journal, says ObamaCare has failed in its primary goal – to create a better market for individual health insurance. The ObamaCare exchanges are performing much worse than expected when they were launched in 2014. Furthermore, this has nothing to do with the Trump administration as Democrats claim.

ObamaCare has failed because of its perverse incentives and haphazard construction. It mandated a long list of expensive coverage benefits while insisting that every policy contain each of these benefits, regardless of need. Therefore, seniors are paying for pediatric dental coverage, men are paying for mammograms, and women are paying for prostate exams. Understandably, under these perverse conditions, premiums have soared.

To make matters worse, young healthy people were asked to pay higher premiums than older sicker people. The Individual Mandate was supposed to force conformance with this plan but they chose to pay the penalty (“tax”) instead. This raised rates for those purchasing coverage because there were not enough healthy people in the case mix. The Trump administration has simply eliminated this nonsense by removing the penalty.

Blase says the congressional Budget Office estimated in 2014 that there would be 25 million enrollees covered in the exchanges in 2019. But the actual figure is about 10 million. Those who don’t qualify for the government subsidies has chosen to go without coverage at all. Democrats try to blame the Trump administration for this decline in the number of covered Americans, but this only represents what people choose when they have the freedom to decline these expensive, little used policies.

The result is the exchanges have become a high-risk pool for lower-income people with a limited selection of plans. The left has accused the Trump administration of sabotage of the system but in reality they have stopped the bleeding. Blase explains:

“First, a market-stability rule limited enrollees’ ability to game ObamaCare’s rules by waiting until they need care to buy coverage. Second, the administration approved state programs to subsidize high-cost patients without spending additional federal money. States implementing these programs have seen premiums drop by more than 10%.”

“The Trump administration also took action to improve options for those left behind. It reversed a late-2016 Obama administration regulation that restricted the ability of families to obtain affordable short-term plans that don’t comply with all the ObamaCare mandates. Another Trump rule, now under court review, expanded businesses’ ability to form association health plans. In total, these expanded options, along with the elimination of the individual mandate penalty, provide Americans an annual net economic benefit of $45 billion per year.”

 

Despite all these adjustments to the Affordable Care Act, it remains a failed system that gets worse with every passing year. The decline in covered lives necessitates rising premiums just as the plans are becoming even less attractive. This downward “death spiral” promises higher premiums, less generous benefits, and higher deductibles unless the system is overhauled soon. The Obama- Biden healthcare plan is a failure and no amount of first aid will ever produce a healthy system. The Biden plan is dead on arrival.