Homenews

The road to single-payer is being paved by two centrist Democrats

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Once upon a time, when single-payer was considered a pipe dream and it was far from certain that Obamacare would become law, the idea of a “public option” represented the greatest realistic hope for progressives seeking to expand access to health care. The House version of health reform included a weak public option, but it was ultimately abandoned because conservative Senate Democrats wouldn’t support it.

Now, nearly a decade later, two centrist Democrats have offered a proposal for a public health plan that is far more aggressive than the 2009 House bill’s public option. Neither Sen. Tim Kaine (D-VA) nor Michael Bennet (D-CO) represents the Democratic Party’s rightmost flank, but both have distanced themselves considerably from the Democratic caucus’ left faction as well. Kaine threw cold water on Sen. Bernie Sanders’ (I-VA) proposal for a single-payer system, saying that he would rather offer “more choices” for health plans. Bennet, meanwhile, has also sounded cool on single-payer.

Yet Kaine and Bennet’s alternative to Sanders’ rapid transition to single-payer would still be a significant step towards the universal coverage and lower costs that a nationwide single-payer system would offer. Indeed, it may be the leftmost proposal that has a realistic chance of becoming law in the next decade. And, should it become law, it offers the United States a path to single-payer that simply does not exist right now.

Kaine and Bennet want to create a new public health plan, which they label “Medicare-X.” This plan would be available to non-elderly individuals on the Affordable Care Act’s health exchanges. As the Washington Post’s Paul Kane summarizes this new health plan, it “would allow anyone to buy into a publicly provided plan using the network of Medicare providers and physicians, at similar rates, with lower-income workers receiving tax credits for the plan.”

The plan would initially be available only in “areas where there is a shortage of insurers or higher health care costs due to less competition,” according to a statement circulated by Bennet and Kaine’s offices. By 2023, however, “Medicare-X would expand to every ZIP code in the country.” The next year, it would also be available on health exchanges serving small businesses and their employees.

Significantly, a spokesperson for Senator Bennet tells ThinkProgress, Medicare X would reimburse health providers for their services at the same rate as Medicare. This is a significant improvement over House Democrats’ 2009 proposal, which would have enabled health providers to charge higher rates to people covered by its public health plan than providers are allowed to charge Medicare.

This chart represents total health expenditures by wealthy
This chart represents total health expenditures by wealthy democracies as a percentage of GDP. See that dot at the far right end of the chart? That’s the United States. CREDIT: OECD.

Reimbursement rates matter because one of the biggest challenges facing the American health care system is our spiraling health costs. The United States spent $9,892 person on health care in 2016. That compares to $4,192 in Great Britain, $4,644 in Canada, $4,600 in France, and $5,551 in Germany. And our costs are rising faster than the rate of inflation.

That’s not a sustainable path. It means that health care will swallow up more and more of our incomes with each passing year.

Medicare does a much better job of controlling costs than the private market, largely because it is able to drive a harder bargain with health providers than private insurers. Elderly patients “accounted for 34 percent of healthcare-related spending in 2010,” so most health providers would lose an enormous share of their income if they refused to accept Medicare. That means that Medicare can pay less for the same treatments than private insurers, because it can threaten to take its enormous share of health care consumers to another provider if a particular doctor or hospital won’t agree to Medicare’s terms.

Kaine and Bennet’s Medicare-X proposal will bring more patients into the Medicare system, potentially increasing Medicare’s bargaining power and enabling it to negotiate prices even lower. And, as more and more patients are brought under Medicare’s umbrella, overall health spending in the United States will begin to fall, as will the average prices charged for various forms of care.

And those lower prices will potentially make other, even more aggressive policy changes possible — including single-payer.

The biggest obstacle to implementing a single-payer system in the United States — besides the obvious challenge of finding enough votes in Congress to pass the legislation — is that it would be prohibitively expensive. An analysis of the Sanders’ campaign’s single-payer proposal (which, it should be noted, called for an unusually generous universal health plan) found that the “average annual cost of the plan would be approximately $2.5 trillion per year.” Meanwhile, the total cost of literally everything the United States government spent money on in 2016 was only $3.9 trillion.

But as prices start to come down, a single-payer plan becomes more and more affordable. The United States, which spends about 17.5 percent of its GDP on health care, risks bankrupting itself if it takes on too much of the nation’s health care costs. But in Canada, where health costs only amount to 10.2 percent of GDP, single-payer becomes much more workable.

Kaine and Bennet may not currently support single-payer, in other words, but they could build the bridge that gets America to a single-payer system.

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