It's Time to Fulfill Our Century-Long Promise
Article by Sawyer Diamond, TPT Staff Writer
Healthcare is perhaps the most divisive issue in American politics, best characterized by town halls across the country during the passage of the landmark Affordable Care Act (ACA), and its subsequent attempted repeal in 2018. The idea that the healthcare model in the United States is dysfunctional, expensive, and leaves millions behind needs no introduction. The inherent problems with the American system are apparent to any casual viewer of US politics; it's been ranked as the single most important issue for voters for years now. Often cited are the dramatic rates of medical-related personal bankruptcies and the shocking figure of how many Americans are forced to use fundraising sites like GoFundMe for their medical costs, but that doesn’t even scratch the surface of the tragedy that is the American healthcare system. 33% of Americans polled in December 2019 report avoiding or delaying medical treatment for illnesses due to the cost of care. Additionally, 137.1 million Americans report a form of financial hardship as a result of medical costs, an unfathomable total in the rest of the developed world.
The Swedish Model
The general response to a single-payer system would be the public option, in which the government provides an opt-in, premium-based insurance plan in order to drive competition and undercut the market. It's worthwhile to note, though, that there would still be problems with this idea, in that it's not paid for progressively; it limits the government's ability to negotiate with primary care providers, and it won't ensure universal coverage. A more desirable alternative to the public option would be to reform our current Medicaid system while dropping the income requirement, replacing all premiums with a taxpayer-funded solution, eliminating the ability of states to limit coverage, and allow the Department of Health & Human Services to negotiate and cap the costs of pharmaceuticals. This would ensure a stabilized system in which all Americans are guaranteed access to healthcare regardless of their economic status while still maintaining choice, specifically among those who are employed with union-negotiated healthcare plans. This would allow for the correct mixture of support from organized labor, reduce the stigma of outright banning private insurance, and increase individual flexibility while keeping the core tenets of single-payer regarding benefits and lower costs for the lower and middle classes.
Such a system would largely be based on the Swedish Model, stressing the importance of the taxpayer-funded element, while differing from proposed Single-Payer plans in that it doesn't intend to completely eliminate voluntary private insurance. The core of the Swedish Model is in providing as many benefits as possible, paired with local control over services. With regard to the argument from purists who solely argue for an uncompromised single-payer regime that private insurance would cannibalize the public plan, you need to look no further than to Sweden, where privatized supplementary care is only purchased for a small percentage of the population, mostly by employers. To summarize, this plan would be progressively funded, lower costs, allow for choice in providers, and emulates the ideal aspects of universal healthcare seen in the Nordic countries.
The “Single-Payer” option is outlined in the H.R.1976 - Medicare for All Act of 2021 introduced by Representative Pramila Jayapal. The “Public Option” is outlined in S.386 - Medicare-X Choice Act of 2021 introduced by Senator Michael Bennet. Graphic: Sawyer Diamond
Universal Catastrophic Coverage
More cost-efficient, albeit likely less appealing to progressives, is the idea of Universal Catastrophic Coverage (UCC) such as the one devised by senior fellow at the Niskanen Center, Ed Dolan. Touted as a potential bipartisan alternative to other options, UCC seeks to fully cover individuals below the poverty line and/or working and middle class households with extensive healthcare costs, while gradually increasing co-pays and deductibles to a maximum of 14.5% of eligible income based on those aforementioned factors and thereafter fully covers catastrophic costs. This intends to provide for affordable, equal coverage with costs adjusted to ability to pay while not dramatically increasing taxes to account for the additional burden on the federal budget associated with other plans. For example, a married couple making 400% of the poverty line ($64,000/year) would require for an income maximum spending limit of 19%, or $12,000 of their income, down from the nearly 34%, or $22,000 they could be expected to pay under their unsubsidized ACA plan. Thus, despite the incremental nature of the UCC, it would disrupt the healthcare market at a magnitude never seen before in American healthcare history for middle and working class families.
Source: Niskanen Center - ‘Figure 4: Coverage Zones’ Note: Low Income is defined as below the poverty line. Graphic: Sawyer Diamond
Jodi Liu in her dissertation for the RAND School estimates that the UCC plan created by Dana Goldman and Kip Hagopian would account for an increase of $648 billion over totals in 2017 under the ACA, with $524 billion being covered by the direct funding sources. Dolan estimates the additional tax revenues collected from increased salaries to match previous total compensation under employee-providing healthcare schemes would more than offset additional costs, resulting in a surplus of $40 billion.
This results in a much more affordable scheme for low and middle income Americans who can also expect a wider swath of coverage, as well as a fiscally responsible element of funding which would potentially draw support from both sides of the aisle. Additional elements tacked onto a potential UCC to further affordability and cut costs could reduce premium rates and allow for more generous coverage. Dolan's proposals were largely focused on supply-side reforms, including expanding spots at medical schools to increase the number of domestic practitioners, as well as reducing administrative spending by the inherent nature of a dominant insurer such as a UCC-scheme would create by lessening fragmentation. He also made note of changing consumer spending habits as a result of cost sharing, resulting in more manageable healthcare spending habits, as well as greater leverage in negotiations if a dominant insurer force were to emerge on the market, ranging from costs of procedures to pharmaceuticals. This could culminate in lower (if not eliminated) premiums, lower maximum out-of-pocket thresholds, and greater limits on certain cost-sharing measures.
Pharmaceuticals
The United States is in a unique position in regard to the costs of its pharmaceuticals. The federal government has limited powers in terms of its ability to place restraints on pricing, nor does it grant itself the power to negotiate out-of-pocket costs for consumers. This has resulted in a large disparity in end-costs for consumers in the US when compared to comparable nations. Even after including rebates and other discounts, prices in the US were still inflated by 256%, an incomprehensible—and unacceptable— increase. This problem has become so severe that nearly 19 million US adults import medication, primarily from Canada. That’s nearly 2/3rds of Canada’s population, which leads to an unfair overburdening of Canadian pharmacies and will result in an increase in drug shortages for our neighbors to the north.
1. The costs shown in the graphic are costs to those purchasing the pharmaceutical, not necessarily the cost to the end-user. 2. Sweden, France, Australia, and Germany have minor shares of their populations who've bought private insurance. Source: OECD, Health at a Glance; Pharmaceutical Spending. Graphic: Sawyer Diamond
State-Level Reform
While it must be conceded that the road to universal coverage is a long and arduous one, a method Democrats could adopt to push these progressive policies is by focusing locally and on the state level, a market effectively curbed by the GOP for years. A method as innocuous as introducing standalone healthcare packages in solid-Blue States has been an idea that will likely rapidly advance going into 2023, as Congress grinds to a halt under a split government.
This strategy has been used to achieve great success in the past, with Washington passing a public-private partnership option intended to cover gaps in the private market. Washington capped payments to hospitals at 160% of Medicare prices, significantly lower than the price of 240% Medicare rates private insurers generally paid. Of course, this quasi-public option came with its drawbacks. As hospitals were voluntary participants in the program, this not only reduced price negotiation leverage for the state, but also made the potential for low acceptance rate of the insurance unattractive to residents. Due to the above, the plan is only active for an estimated ~1% of the state’s population, leading many to decry the effort as failed. Other states, however, are watching on carefully. With states such as Colorado and Nevada having already passed measures to implement a public option in 2023 and 2026 respectively, with the added caveat of forcing hospitals to accept the insurance.
TL - BR: Washington Governor Jay Inslee signing the nation’s first state public option. Calcare, NYHA, and Masscare demonstrations. Blue States have spearheaded state-level universal healthcare proposals, which could serve as a useful form of entryism into the mainstream to gain recognition on the Federal Level, as seen in Canada’s implementation of single-payer in the mid-20th Century.
Closing
We—the left, center, and everything in between— made monumental progress with the passage of the Affordable Care Act, establishing a common market to make healthcare more accessible and affordable for millions of Americans, and unveiled a host of consumer protections. However, after a century of promises, from the AALL Health Care Plan of 1906, to the range of healthcare proposals from Democrats in the most recent Presidential primary, we have still not reached the promised land of healthcare coverage. We cannot stop, we will not stop, until not a single American lacks comprehensive coverage. An America where our citizens don’t go to sleep worrying about if they can survive another night of prescription rationing, worrying about choosing between putting clothes on their children’s backs or defaulting on medical debt, or worrying about if one medical incident while between jobs will put them into insurmountable financial ruin. We must not stop fighting for the sake of every American living without their necessities met. Our values are worth fighting for, because the benefit of our neighbors benefits us all, and pushes us towards that shining city on a hill that we were always meant to be.
The views articulated in this article are the writer’s own, and do not necessarily reflect the official stances of The Progressive Teen or High School Democrats America.