On the Road to Medicare for All Competition among private health insurance firms can produce cost savings or higher quality care represents the victory of illusion over evidence. Narrow and ever-changing networks that too often do not include quality providers Arbitrary denials of care Changing rules that undermine access No continuity of care Lack of accountability to the public No incentive to share innovations that work or those that do not work Beware the Perils of Commercial Insurance

Agenda: Navigating through the biggest perils People’s lack of understanding of the difference between social insurance and commercial insurance Key messages about commercial insurance Proposals that try to split the baby through a Medicare buy-in option Medicare for all Medicare for All and the Perils of Commercial Insurance

Key differences between Medicare and commercial insurance Medicare: We’re all in it together Commercial insurance: Every person for herself Public, no profit Absorbs and broadly distributes risk Insulates and protects all of us from risk, individuals who have or may have costly and complex medical needs as well as the relatively healthy Reins in costs through efficiencies and economies of scale Profit-driven Inefficient; drives up costs Designed to attract individuals with the fewest needs Shifts costs to people most in need, rations care Complex and accountable to shareholders, not public Medicare for All and the Perils of Commercial Insurance

But, what happens when people need complex and costly care? Commercial health plans are only as viable as their weakest link. It is a race to the bottom. That’s why you never hear a commercial health plan boasting about its great cancer care or stroke care. They cater to the healthy. And, most people are healthy. They do not use a lot of health care. So, they can be relatively satisfied with commercial insurance. But, what happens when people need complex and costly care? Who knows? Sometimes they get it, and sometimes we hear the horror stories. Which health plans are A-rated? I couldn’t tell you. Medicare for All and the Perils of Commercial Insurance

Perils of commercial insurance Medicare Advantage Medicare Part D prescription drug coverage Affordable Care Act Medicare Advantage for all Medicare Choice Medicare Extra Medicare for All and the Perils of Commercial Insurance

Lessons from ACA and history Most states lack the will, skill and resources to regulate commercial health insurers on behalf of their residents Insurers are more powerful than any state, even states with ambition to regulate insurers 12.2 percent of adults in US remain uninsured, and many more are underinsured We need a federal health care system that provides cradle to grave coverage, regulates prices and pools risk to guarantee health and financial security to all Americans. Medicare for All and the Perils of Commercial Insurance

Why not Medicare Advantage for all? Would anyone choose it if traditional Medicare were less costly? Drives up health care costs Rations care, shifts costs Lose freedom to choose your doctors and hospitals Inefficient, bureaucratic waste Undermines innovation for the public good No focus on public health Medicare for All and the Perils of Commercial Insurance

Why not traditional Medicare for all? The good: The bad: Guaranteed automatic coverage Equitable: Pools and spreads risk Freedom to choose doctors and hospitals anywhere in US Affordable: Reins in costs Innovative: Drives system improvements Three parts, A, B and D No catastrophic cap; need supplemental coverage Commercial drug coverage No routine dental, hearing and vision coverage or long-term care services and supports Medicare for All and the Perils of Commercial Insurance

Medicare for all—What are we looking for? Health care as a right, not a commodity Freedom Security Affordability Unity Efficiency Innovation Equitable progressive financing Different from traditional Medicare. Medicare for all fills the gaps in traditional Medicare. And, it would eliminate Medicare Advantage plans. It needs to. Otherwise, Medicare Advantage plans drive up Medicare costs, fragment risk, steer the sickest to traditional Medicare. Medicare for All and the Perils of Commercial Insurance

The road to Medicare for all State plans: Vermont and California National proposals: Taking us off-road Merkley/Murphy plan, Kaine/Bennet plan Center for American Progress, Medicare Extra plan What we need: Guaranteed health care for all Peace of mind for all Sanders plan, HR 676 Lots of ways. Let’s keep it simple: Everyone covered. One negotiated price for every service. Non-profit/no commercial players. It won’t be perfect. Never will be perfect. It will be so much better. Let’s not negotiate against ourselves. Medicare for All and the Perils of Commercial Insurance

State-based plans: California, Vermont Single payer, end of commercial coverage, wildly varying rates Efficiencies Cradle to grave coverage Cost is the challenge Federal government has greater leverage https://www.seattletimes.com/nation-world/appendectomy-can-cost-1500-8212-or-182955/ Appendectomy rates—variation 121 times https://www.vox.com/policy-and-politics/2018/4/11/17226574/california-health-care-pricing-regulation Medicare for All and the Perils of Commercial Insurance

Choose Medicare Act: Merkley, Murphy The good: The bad: Recognizes value of Medicare Expands government-administered health care Improves ACA, allows individuals and companies to buy into Medicare. Federal financial assistance to people up to 600% FPL Does not guarantee coverage for all Threatens Medicare Relies on state oversight Health care costs remain unsustainable (Kaine-Bennett Medicare buy-in limits choice to individuals.) Medicare for All and the Perils of Commercial Insurance

Medicare Extra: Center for American Progress plan New enhanced version of Medicare and Medicare Advantage Automatic guaranteed coverage And, people can keep the coverage they have Progressive financing, wealthy pay more, Free coverage to people under 150% of FPL, Americans earning more than 500% of FPL, would spend 10 percent of their after-tax income for their health insurance, as well as about 20 percent coinsurance Moving in the right direction. Government standardizes benefits for everyone CAP recognizes that we cannot rely on commercial health insurers to guarantee good affordable coverage in America and that we cannot rely on states to ensure access to care for their residents. And, It relies on the federal government to regulate prices for its Medicare Extra plan because “competition” cannot and has not reined prices in. These are all important lessons learned from the Affordable Care Act. Like the Sanders plan, Medicare Extra (essentially traditional Medicare with expanded benefits and most gaps filled) is administered by the federal government. CAP does not go as far as Sanders to eliminate commercial insurance. Rather, CAP attempts to do a better job of leveling the playing field between commercial insurance and the government plan, a Sisyphisian task. And, likely, the CAP plan’s Achilles heel. As we have seen, if given any latitude, commercial health insurers will always design their health plans to avoid enrolling people with costly conditions, keeping their networks free of centers of excellence and top specialists. They will never reveal the value of their coverage for people who develop complex conditions, such as heart disease, cancer, stroke or diabetes. Moreover, government has never been able to oversee them effectively or prevent them from committing fraud, wrongly denying care and otherwise keeping the public in the dark about what they offer their members. CAP envisions reining the commercial health plans in significantly more than Medicare Advantage plans, but it is hard to understand how it will be enough. Guarantees coverage to all, ends underinsurance, regulates prices. Newborns, uninsured, people turning 65 automatically enrolled. Unlike Sanders, CAP also allows people with employer coverage and Medicare to keep the coverage they currently have if they so choose. People with Medicaid would be enrolled in Medicare Extra. And, everyone enrolled in Medicare Extra has the choice of this government-administered traditional-Medicare-like plan or Medicare Choice, essentially a commercial Medicare Advantage plan with expanded benefits. Added administrative costs of all these options are considerable, especially if there is appropriate oversight of the commercial plans Financing relies on wealthier Americans to pay more and provides free coverage to people under 150 percent of the federal poverty level. CAP expects that Americans earning more than 500 percent of the federal poverty level, just over $60,000 a year for an individual ($104,000 for a couple), would spend 10 percent of their after-tax income for their health insurance, as well as about 20 percent coinsurance, which is likely to make it unaffordable to many. Medicare for All and the Perils of Commercial Insurance

Medicare for All and the Perils of Commercial Insurance

Sanders Medicare for All Act and HR 676 Guaranteed automatic comprehensive coverage through one government- administered plan, including vision, dental, hearing Medicare, Medicaid and employer coverage replaced with a single improved Medicare social insurance plan. No restrictive networks No out-of-pocket costs except modest ones for prescription drugs Sanders: Four years to transition into the new Medicare for All program HR 676: Long-term care services and supports, but missing in Sanders plan Financing progressive, with wealthier people paying more Phased in over four years. In year one, Medicare expands coverage to include dental, vision and hearing, people 35 and over can buy in. Kids up to 18 are eligible. Medicare for All and the Perils of Commercial Insurance

Responses to the doubters Americans don’t trust government: Americans like government as a payer. They don’t think of Medicare as a government program because it relies on private doctors and other health care providers. Americans don’t care who pays; they care that they have care from the doctors and hospitals they know and trust. 250 million will lose their insurance: They will gain better coverage automatically, and they will be able to continue seeing the doctors they know and trust. Death panels: Millions are going without care, dying today. Higher taxes: Overall, people spending less and getting more Medicare for All and the Perils of Commercial Insurance