The Warren Plan and the Prospects for Medicare for All

I’ve been ambivalentabout the politics and policy of single-payer for a long time. That’s for three reasons

First, while I by and large don’t think that a more left-wing program will hurt Democrats in the general election—just the opposite is true—there are certain ways it can hurt. The first is if we put forward plans that require tax increases on the working and middle classes. I do think that ultimately some of those tax increases will be necessary and that the benefits received in return for them will be greater than the costs of the tax increases. But it is a fundamental rule of politics that people are more agitated by what they are losing than what they are gaining. And talking about tax increases for future benefits is hard to explain and hard to defend especially because most Americans are not terribly well-informed about politics and public policy and very much distrust new ideas, especially when taxes are concerned. So I was dubious about convincing a majority of Americans that a tax increase will be offset by the elimination of health care premiums and out of pocket health care costs. It’s true. But it’s, sadly, a hard case to make.

Warren’s development of a plan that does not require any tax increases on the middle class or those below it, is thus a game changer. A few weeks ago, I presented some ideas that I thought would make that possible—basically requiring corporations to pay what they now pay for employer-based insurance to the M4A plan and requiring states to pay what they now pay for Medicaid to same plan. Warren’s plan includes those ideas as well as something else I suggested, moving from fee for service to value-based care as a way of reducing health care costs. Together with some optimistic but not totally unrealistic assumptions about administrative cost savings due to M4A, the additional new taxes needed for the plan drops from about $34 to 20 trillion over ten years. And then she put forward some good tax ideas—a financial transaction tax which I’ve long supported and a doubling of her tax on wealth—to make up that difference. 

Second, I’ve been worried that a call to end private health insurance would generate anxiety among Americans. It not true that they like their health insurance now. But it is familiar. And, again, trading something familiar for something unknown is always difficult. And it is especially difficult when we are asking people to accept something very important to them, health care, from a government they do not trust. (And which they do not trust for very good reasons.)

Although polls don’t quite show that M4A has totally broken through this barrier, I think we are actually getting there and can succeed if M4A becomes the rallying cry of a Democratic candidate for president. (People underestimate how the polls can change once a critical mass of politicians, and especially the most critical ones, embrace it.) One step in doing that was rebranding single as Medicare for All. People like Medicare although, frankly, it actually has a lot of problems which the M4A plan will have to fix. But the Medicare for All label has really helped overcome opposition to single payer. 

And of course, the frustration with the ACA and the continuing perfidy of insurance companies has helped do so as well. I think most people know that many of the problems with the ACA are the result of Republican sabotage. But some of those frustrations—such as the difficulty of picking between plans—is built into the ACA. And others, such as not having a single payer plan to force down the costs of care, are built in as well. More importantly, private, mostly employer-based health insurance keeps failing people with ever higher out of pocket expenses and premiums and insurance company denials of care. Higher subsidies and a public option can fix the system. But the effort to enact them may no longer be less than that necessary to create a single payer system. Nine years of additional frustration with this system—and additional organizing against insurance companies—since the ACA passed has led people to become more ready to embrace something new. 

My third concern with single payer / M4A is more technical but in some ways deeper. For all that administrative waste and insurance company profits cost us, they are not at all the biggest driver of health care cost increases. The real problem is uncoordinated and unnecessary medical care generated by a fee for service system and medical culture. Together they lead to multiple, uncoordinated treatments, many of which are at best unhelpful and at worst harmful to patients. So long as we keep fee for service medical care, someone has to be looking over the shoulders of doctors and hospitals and telling them, “no, you can’t spend on this or that because it is wasteful or ineffective or harmful.” If we don’t do that health care costs will grow even faster and we will get no better care. One reason people hate health insurance companies is that they are the ones who say no. And while it’s horrible when they say “no” to people who could benefit from some procedure or drug, often they should be saying “no” to wasteful or unnecessary care. My fear was that M4A would put the federal government in the position of saying “no.” If the federal government were saying “no,” however, that would mean that the hatred would turn from insurance companies to the federal government which would not just undermine M4A but the whole program of the left. And if the federal government did not say “no,” then health care costs—and the taxes needed to pay for them—would explode.

Until about six months ago I thought that the best way to fix the problem was to improve the ACA with better subsidies and a public option while using it to move to the alternative to fee for service—the health care jargon is value-based care. And then we could fully embrace M4A. But I’ve become convinced that the changes the ACA have already created in the health care system has moved us to a place where we can do both at the same time. Payment and reimbursement systems under M4A might, in fact, be the most effective way of getting to a broad adoption of value-based care. 

So that’s why I think M4A is both good politics and good policy for the 2020 election.