The “Medicare-for-All” Debate

March 26, 2019 | Featured Articles

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The passage of Medicare under the Johnson Administration in 1965 was opposed by mostly Republican members of Congress who believed it would “sever the ties between doctors and their patients.” They also broadly feared it would lead to a wider acceptance of socialism – at the same time the Cold War with the Soviet Union was raging.

While the “Medicare-for-All” (MfA) bill of 2003 (H.R. 676) was replaced by the 2010 Affordable Care Act (H.R. 3590), there were still many MfA proponents. Therefore, another MfA bill (S.1804) was introduced in 2017 by Senator Sanders – although there was no doubt that Senate Republicans under a Trump Administration would block it.

Among the current Democratic primary hopefuls seeking to be the Democratic Party’s candidate in the 2020 presidential election, approval of MfA has become another way for these candidates (especially Bernie Sanders) to differentiate themselves from each other to the voting public.

The following presentation is an attempt to clarify whether MfA is actually feasible in the US, and why the debate surrounding its feasibility matters – regardless of whether a vote in the Senate ever actually takes place.

Differences Between the Goals of the ACA and “Medicare-for-All” (MfA)

Essentially, the goal of the ACA was to provide health insurance to all Americans, but –except for the equality embedded in the Essential Health Benefits (EHBs) requirement – reducing disparities in all aspects of insurance coverage based on socioeconomic status was not at its core. In contrast, MfA has a goal of increasing equality across the US population in accessing healthcare through implementation of a “single-payer” model.

Meanwhile, President Trump and the Republican Congress have attacked the ACA on multiple fronts in an effort to return to the same nationwide healthcare system that had left 50.7 million Americans in 2009 without health insurance – and resulting in a tremendous obstacle to healthcare access for specific subpopulations across the US (i.e., people with pre-existing conditions and low-income workers).

Historically Assessing Medicare – Success or Not?

Medicare was a federal response in 1965 to the problem of a health system failing older Americans. For a 12-month period between 1962-1963, the CDC reported the following in 2009: while 28% of the population under age 65 had no hospital insurance, 46% of seniors had no hospital insurance.

In 2007, a study of Medicare’s impact conducted by the National Bureau of Economic Research reported a definitive decrease in the one-year mortality rates in Medicare-enrolled patients due to Medicare enactment. This report concluded that Medicare decreased both mortality and morbidity in Medicare-enrolled people aged 65 and older (as well as reduced hospital readmissions). Clearly, Medicare was a positive step towards improving the public health of a subset of Americans that had survived the Great Depression.

In response to the inability of Medicare to contain spiraling healthcare costs, the Centers for Medicare and Medicaid Services (CMS) – after ACA passage – embraced a shift to value-based payments. Diverse health economic studies concluded that the longstanding hospital Fee-for-Service payment system was a key contributor to spiraling healthcare system costs, and the CMS had an internal budgetary incentive to curb expenditures.

Meanwhile, 98% of seniors (56.8 million people aged at least 65) are now covered by Medicare in comparison to only 19 million in 1966. The “umbrella” that Medicare represents has stretched beyond anything imagined in 1966 (so achieving any secondary CMS goal of cost-containment was rendered impossible by unanticipated changed life patterns). Indeed, most seniors in the US are living to an advanced age never anticipated in the 1960s, and also living longer alone in their own homes with minimal psychosocial supports.

Why Turning Back the Clock on Healthcare Access is a Bad Idea

In accordance with President Trump’s election promise to his voters, Senate Leader Mitch McConnell guided Republican senators in their (fortunately) failed attempt to fully repeal the ACA – although it has been significantly weakened through their other strategies. Had they succeeded, hospitals and physicians (as well as the public) would have been subjected to upheaval and confusion beyond that existent before the ACA was passed in 2010.

Notably, as calculated by the Congressional Budget Office (CBO) in 2015 in conjunction with a Republic-sponsored Senate bill to repeal the ACA, an additional 19 million uninsured people were predicted by 2016 – and 24 million by 2025 (with the CBO estimating an ACA repeal to result in an increased deficit of $137 B).

Before Medicare was enacted, millions of seniors were utterly dependent upon their adult children to pay their medical expenses or forego healthcare. Likewise – before the ACA – millions of adults of all ages were unable to obtain health insurance to cover their treatment costs. The result is that many became needlessly disabled, unable to participate in the labor force, and financially dependent upon their adult children.

It is widely recognized globally that the healthcare cost burden of a nation is linked to the proportion of its population unable to access healthcare services (since providing treatment for chronic diseases is more expensive than treatment at an early disease stage). This is a major reason that turning the clock back to a pre-ACA insurance climate does not make sense from either a public health or economics standpoint.

Comparing Canada’s Health System to the US Health System

Paid partially through federal and provincial taxes, Canada’s “single-payer” health system is administered through plans created in each province or territory. While specific “necessary” health services (e.g., hospitals, physicians, and surgical dentistry) must be covered, provinces and territories have a great deal of discretion in their covered healthcare – and Canadians can also purchase supplemental health insurance. Canada’s physicians are not government employees, but are private providers similar to the US. Meanwhile, Canada’s medication prices are also lower than in the US.

According to an article in 2018 in the Washington Post, 90% of Canadians are opposed to eliminating their “single-payer” healthcare system despite some frustrations (such as long waiting-times for elective surgeries). However, an article in 2017 in the Queen’s Gazette (of Queen’s University in Kingston, Ontario, Canada) suggested that their system was “underperforming” due to lack of adaptation to changing Canadian healthcare needs and trends.

Numerous studies have shown that the US has one of the most expensive healthcare systems in the world, and it is certainly more expensive than the system in Canada. We also are not quickly adapting to changing healthcare trends (such as the emergence of individually-tailored, gene therapy cancer treatments costing an exorbitant price per dose).

How the US Healthcare System’s Stakeholders Drive Up Costs and Prevent Change

There are four primary stakeholders that shape policy in the US healthcare system:

  1. Healthcare providers;
  2. Insurance companies;
  3. Pharmaceutical companies;
  4. Medical schools

Each of these four stakeholders drives up the cost of healthcare in the US (albeit for different reasons). Private insurers have exerted tremendous political pressure through lobbies to preserve their financial status and influence over physicians and hospitals. Partly due to high US malpractice costs and the high cost of medical school tuition, physicians and hospitals in the US are also focused on maintaining as high a revenue stream as possible – regardless of the cost to the overall healthcare system.

Fear-Mongering as a Stakeholder Strategy for Resisting Change

A recent New York Times article in 2019 reported that lobbies for the healthcare insurance and medical industries are already galvanizing against MfA – should a Democratic candidate supporting MfA win the 2020 election. The same fear-mongering employed against Medicare – that enactment of an MfA will lead to socialism – is being employed again to stifle insightful debate.

What is the Best Approach to Improving the US Healthcare System?

The existence of other health systems that are less costly than in the US – along with the recognized, skyrocketing, stakeholder-fostered costs to our healthcare system – show that something needs to be done in the US to come up with a solution. Whether through “fixing” the ACA or enacting MfA, the US healthcare system needs to be one that promotes more equal access to care for all Americans in order for the US to regain global respect for our expressed values as a nation.

Avoiding Further Harm to the Nation’s Public Health

As shown by the many years after President Truman asked Congress to create a national insurance fund that Republican senators – in tandem with healthcare system stakeholders – resisted this idea before Medicare was enacted under President Johnson, passage of an MfA bill may only be possible in the US if it occurs in incremental stages (such as through enabling enrollment at age 55 instead of 65, followed by age 40 at a future time).

According to an article in Health Affairs in 2017, Senator Sanders’ proposed MfA bill would end the Medicare and Medicaid programs – rather than expand them. This may not be a path toward minimizing disruption of the functional elements of our healthcare system. However, that also does not mean that any proposed MfA would be disruptive – nor does it mean that MfA is a better “fit” for US society than either the ACA (or some other model).

Strengthening the ACA is a short-term solution to a long-term (generational) problem, but sometimes a short-term solution is needed. Unfortunately, President Trump and congressional Republicans are focused on destroying the ACA, and totally resistant to a “single-payer” model.

Conclusion – Self-Education as the Key to an Informed Decision

Instead of enabling the public to participate in the debate, Republicans and special interest groups are still engaged in the same misinformation campaign as before Medicare’s passage – which is claiming that MfA would be a first step in the US toward a socialist dictatorship.

Just as President Trump’s goal of rebuilding a manufacturing industry as existed in the 1960s is unrealistic, returning to the healthcare system of the 1960s (when most physicians still made “house-calls”) is likewise unrealistic. The public deserves to truly understand the ramifications of diverse proposals for healthcare system change in order to participate in the national debate. Masking it by fear mongering does not contribute to a real solution.