During the first two Democratic presidential candidate debates held last month, NBC correspondent Lester Holt asked for a show of hands among the candidates who would support eliminating private health insurance in favor of a government-run plan. Only four candidates — Senators Bernie Sanders, Kamala Harris, Elizabeth Warren, and New York City Mayor Bill de Blasio — raised their hands. (Although Senator Harris later sought to clarify that she misinterpreted the question and would allow a very limited role for private insurance to cover services not included in a public plan.)
None of them should have raised their hands in my opinion, not because the debate over moving to a publicly-financed plan like Medicare isn’t important. It’s because the question can’t be fairly answered with a simple hands-up or hands-down response.
The answer depends on policy decisions, the details, and the politics.
It depends on what a Medicare-type public plan would cover and whether co-payments and deductibles would apply to covered services. There is little need for private insurance if the public plan covered just about everything, with no-cost sharing by the individual, as Sanders’ Medicare-for-All bill proposes.
It depends on what the public plan would cost, and who would pay for it. A generous public plan, like Sanders proposes, could add trillions of dollars in federal health-care spending, financed partly by cuts in payments to hospitals, physicians, and drug companies, and partly paid for by higher taxes, although it might save money overall because of savings from regulated prices.
Experts disagree on how much it might cost or save because, well, it depends on policy choices and how patients, clinicians, and hospitals might alter their behavior. Savings would largely depend on whether the government really would be willing and able to rein in what drug companies, hospitals, medical device manufacturers, and physicians charge; Congress’ track record shows that it rarely follows through on efforts to cut payments. And if the government did reduce payments, would physicians and hospitals be allowed to charge more than the approved rate? Would enough of them be able to afford to participate in the program at the reduced rates offered?
It depends on whether a public plan would deliver on the potential to reduce spending on health-care administration. A Medicare-for-All model could contract with private insurers to deliver required benefits, just like the current Medicare program contracts with Medicare Advantage insurance plans, providing care to one out of three Medicare beneficiaries, lowering the estimated savings from reduced administrative costs compared to having a single payer run entirely by the government.
It depends on whether the public would trust the government to run the entire health care system, when public trust in government is at near historic lows. It depends on whether the 176 million Americans who have private insurance either from their employer or through the marketplace, would support legislation that would require them to switch to a public plan.
If private insurance was still allowed along with a public plan, it would depend on whether it would only cover services not offered by the public plan; or provide additional coverage of services also covered by the public plan in a way that would give people who bought it more options (such as coverage for a private hospital room, or care from a physician not participating in the public plan). Or would it be set up in a way that gave everyone a choice of either enrolling in the public plan or keeping their private insurance? If the latter, would private plans be required to offer benefits, deductibles, and co-pays that are comparable to the public plan?
And, yes, it depends on the politics and vote counting. Many Democrats would favor Medicare-for-All as the ideal, but many also understand that getting it would require capturing the White House, keeping the House of Representatives, taking the Senate, persuading the large majority of Americans with private insurance to give it up, and overcoming opposition from hospitals, drug companies, and physicians to price cuts.
Such political realities are why more of the Democratic candidates seem to favor offering Americans a choice of a public Medicare-type plan or keeping private insurance. But would a public choice approach really be more politically achievable than Medicare-for-All? How would it work? What rules would apply to the public plan and private insurance to ensure a level playing field? How would it be paid for?
Here, too, it depends on the details.
President Donald Trump famously said, “Nobody knew health care could be so complicated.” Actually, many of us who work in health policy could have told him. The debate over Medicare-for-All with no private insurance, or Medicare-for-All-Who-Want-It with private insurance, is extremely important and extremely complicated, and does not lend itself to decision by a show of hands.