Deeper Analysis of the Top Democratic Contenders’ Health Proposals

^{By Dean Celia}

While skeptics explain what’s wrong with Medicare-for-All, its proponents criticize more moderate plans. What does our panel of experts think? And will compromise and pragmatism eventually win out?

In the October 2019 issue of First Report Managed Care, we broke down what the leading Democratic candidates for president—Joe Biden, Pete Buttigieg, Kamala Harris, Bernie Sanders, and Elizabeth Warren—are really saying about health care. Our analysis continues with a look at how skeptics view the various plans and what might happen to a single-payer bill that enters Congress. Is compromise in the offing? Will pragmatism win out? Does Elizabeth Warren have something up her sleeve? And in the end will any of it actually matter to voters?

Medicare-for-All’s naysayers say that the program:

• is too expensive;
• eliminates consumer choice;
• is a dramatic shift that cannot occur without posing significant challenges, particularly in the four-year window proposed in the bill written by Sanders; and
• will not garner enough moderate or GOP support that is needed to pass and implement it.

Still, Melissa Andel, vice president of health policy at Applied Policy in Washington, DC, said she thinks that the program’s massive price tag and elimination of consumer choice “are legitimate tradeoffs. It’s just a question of whether Americans are willing to make them.”

The fact that Medicare-for-All “is likely to add trillions to the federal budget” will not be lost on voters, said Gary Owens, MD, president of Gary Owens Associates in Ocean View, DE. [Estimates from both sides of the aisle put the costs at more than $30 trillion over 10 years. To put that in perspective, consider that in the last fiscal year, the entire federal budget was $ 4 trillion.] “Americans want health care, but they do not want to pay more taxes to get it.” He added that he sees the loss of consumer choice as the highest of all of Medicare-for-All’s hurdles. “Most Americans want to keep their current health plans.”

Which leads us to the prospect of compromise. Medicare-for-All supporters might call this selling out. Assuming Sanders or Warren (Medicare-for-All’s chief cheerleaders) become president, how would their plan emerge from Washington’s meat grinder? Ms Andel thinks voters in purple states are in the driver’s seat. “Democrats control the House because they were able to flip a bunch of suburban, moderately Republican districts in 2018. Voters in these districts are likely to have generous, employer-sponsored health plans that they don’t want to lose. They are also likely to be in income brackets that would be negatively impacted by the tax reform needed to finance more ambitious goals.”

Which means as president, Sanders or Warren would likely have to compromise in order to have a prayer of getting the 60 votes required for passage in the Senate. “Whoever is elected President can’t do this alone,” said Ms Andel. Daniel Sontupe, associate partner and director market access & payer marketing at The Bloc Value Builders in New York, NY, added, “As all-in as Sanders appears to be, he would have to concede something to get the bill through.”

A Time to Be Bold?

Meanwhile, those who discount the more moderate plans put forth by Biden, Buttigieg, and Harris maintain that these proposals:

• are not bold enough;
• won’t put a dent in administrative overhead;
• will create a pool of sicker and older people in the public option plan that is at the core of these proposals; and
• put too much faith in private health insurers, which will continue to act in the best interests of their shareholders.

According to Mr Sontupe, “Boldness is in the implementation of the policy,” not necessarily the policy itself. For that reason, he thinks it makes more sense to focus on benefit and value, not just cost. “If we think about those things, we will be in a better place. The program does not have to be perfect.”

Ms Andel said she agrees with skeptics that the public option will skew the risk pool. She thinks experts will need to rely on data from the Affordable Care Act to inform decisions and predict likely scenarios. Mr Sontupe said, “I don’t understand the argument. The pool of sicker and older people exist no matter what health plan is in place. In England, they just stop providing services to individuals in this group. We don’t do that in this country.”

Meanwhile, Ms Andel noted that the concern about administrative cost is overblown. She likened the situation to one where would-be financial advisors urge people not to spend money on Starbucks lattes in an effort to reduce spending. “The cost of the latte seems expensive when singled out, but in the grand scheme of things is not a serious budgetary line item.” Similarly, “Administrative overhead is not the driver of health spending that people seem to think it is.” Single-payer will likely reduce administrative expenses, but not to zero.  “I am not convinced that there is enough savings there to make a noticeable difference.”

The Democratic Primary-General Election Conundrum

Health care is a microcosm of the challenges the Democratic presidential candidates face as they vie for the nomination. They have to choose whether to jump on the pendulum as it swings left (where Democratic primaries are more easily won), or stay closer to the center in the interest of pragmatism. The irony is that promising Medicare-for-All might help win the nomination but lose the general election because the nominee may not be able to convince enough moderate voters in swing states that single-payer is the answer.

Conversely, pushing more moderate proposals might not be enough to win the nomination, but it could be just what the eventual Democratic nominee needs in his or her hip pocket to win over those swing voters in the general election.

Complicating things further is the fact that the race for the White House is about electoral votes; total votes (ie the popular vote) do not matter. Thus, backing Medicare-for-All could boost the popular vote count for the Democratic nominee as traditionally blue states widen the nominee’s margin. But it won’t matter because, fair or not, the votes that count most toward gaining an electoral victory are found in states such as Pennsylvania, Michigan, and Wisconsin.  

“There are clearly differences between primary voters and general election voters, which tend to be much more moderate,” explained Ms Andel. “When you remind yourself that the President will also need Congress to implement his or her health care reform package, the message has to be attractive enough to moderates. Otherwise the math simply does not work.”

Norm Smith a Philadelphia-based principal payer market research consultant, put it this way: “Medicare-for-All works for the left, but it is not a winner across America. Look at a map of the US. The entire center of the country is not going to buy into this level of change.”

At some point, added Ms Andel, it may be necessary for those in the far-left wing of the Democratic party to come to grips with who brought them to the dance. “While many progressive candidates were successful in the 2018 midterm election, moderates were even more successful, and are actually responsible for the Democrats regaining control of the House.” 

Warren Leaves Sanders for a Plan of Her Own

Could it be that Sanders and Warren realize this and will adjust their messaging and policies accordingly if they get the nomination? No one sees Sanders budging—he has been calling for a single-payer system since the early 1970s and remains very consistent on the issue. But what about Warren? In early October, Dr Owens told us he wonders if she has something up her sleeve. “I think even Warren knows that Medicare-for-All [as proposed by Sanders] is simply too much change. For now, she is playing to Sanders’ base to gain traction with his supporters when he eventually fades.”

Dr Owens was partly correct. On November 1, Warren freed herself from the Sanders bill and finally released her own plan. She is still pushing for single-payer health care but, unlike the Sanders plan, her proposal does not call for taxes on the middle class. Instead, she intends to require corporations to help fund coverage. She maintains that this will come at zero added expense for these companies; they will simply start paying the government what they currently shell out to private insurers.

Other sources of funding would include shifting state funds now allocated for Medicaid to Warren’s single-payer plan (which would fund individuals now on Medicaid), further taxes on corporations and ultra-wealthy individuals, and strengthening the IRS to collect outstanding taxes that currently go uncollected. Warren also assumes more significant cost savings than other plans estimate. The merits of her proposal are currently being debated, and are sure to be a hot topic during the November Democratic debate.

In the end, Mr Smith and Ms Andel wondered if any of this will really matter. “The level of health care literacy of most voters is not where it needs to be to truly analyze these plans,” offered Mr Smith. “I don’t see it as a significant voting issue of most people.”

So, what will matter in the voting booth? “President Trump is such a polarizing figure,” concluded Ms Andel.  “The 2020 election is shaping up as a referendum on him as an individual, not on issues.”