Medicare For All: A Discussion Worth Having?

Our Exclusive Guest Editorial
by Larry Matheis

“The legitimate object of government is to do for the people what needs to be done, but which they cannot, by individual effort, do at all, or do so well, for themselves.”
-Abraham Lincoln

“This is an important hour for the Nation, for those of our citizens who have completed their tour of duty and have moved to the sidelines. These are the days that we are trying to celebrate for them. These people are our prideful responsibility and they are entitled, among other benefits, to the best medical protection available.”
-Former President Harry S. Truman at the signing by President Lyndon Johnson of the Medicare bill (H.R. 6675) on June 30, 1965

“Medicare-for-All” has made a dramatic return to the national spotlight as a rallying cry for the growing army of Democratic candidates for president. Is “Medicare-for-All” a serious policy proposal to resolve the most significant gap in the American healthcare system or is it campaign rhetoric intended to excite base voters and solicit contributions? Perhaps, it’s both.

Since the administration of Harry Truman (1945-1952), each time that Democrats have proposed a national single payer system and had the power to pass legislation, circumstances have forced them to accept something else. During President Lyndon Johnson’s administration (1963-1968), the Democrats settled for the creation of the Medicare and Medicaid programs along with considerable investments in health care system expansion. Since the popular federal Medicare program created during those years already provides coverage for 60 million Americans, “Medicare-for-All” has become the “single payer” coverage system favored by many Democratic Party leaders. For them, “Medicare for All” is uniquely American and the next best step in addressing the perplexing issues involved in providing health care coverage for 332 million Americans.

When President Barack Obama took office in 2009 with Democrats in control of both houses of Congress, healthcare coverage was one of the major emerging issues because of the impact of the Great Recession. High unemployment rates left growing numbers of Americans without health insurance together with overall rising health care costs became a major cause of personal bankruptcies. Therefore, for practical political purposes, “Medicare for All” was replaced as the Democratic healthcare policy goal to an approach that targeted those Americans for whom obtaining healthcare coverage was most challenging. Democratic Party leadership favored the approach that became the “Patient Protection and Affordable Care Act of 2010” (ACA). To validate this step with other Democrats as much as the public, the dying Senator Edward Kennedy, one of the most impassioned advocates of “Medicare-for-All,” was brought to the Senate floor from the hospital for key votes. His death and replacement by Republican Sen. Scott Brown, who ran against the ACA, forced adoption of the bill before it was actually ready. If the Senate waited to take final action until they had perfected the rather messy piece of legislation, Brown would have been in a position to block final passage. With some angst, the law was forced through the Congress before the new senator was sworn in. The full implementation of the law didn’t occur until 2014 (some parts have never been fully implemented), which was at least partially attributable to this chaotic history and to the fact that it passed without a single Republican vote in either chamber of Congress, although much of the bill reflected Republican proposals from the 1990s.

The ACA was a signature piece of legislation and a defining act of former President Barack Obama’s presidency. It was similarly a legacy act of leadership by then Senate Majority Leader Harry Reid. Nevertheless, several of the major candidates in the growing Democratic Presidential field have embraced “Medicare-for-All” as an issue for the 2020 election. It’s expected that all will have to address it in one way or another. This may seem inconsistent with the priority of Congressional Democrats to defend and improve the ACA.

However, it really isn’t that inconsistent. The ACA provides health care coverage to a significant additional number of Americans and adopted several important policy measures (addition of adult children up to the age of 26 to their parents’ health plans and the elimination of the much abused “pre-existing condition” clauses invented by the vigilant insurance industry lawyers to avoid financial responsibility for treating patients with expensive illnesses or conditions), but it comes up quite short of universality. Uninsured Americans who earn more than 138 percent of the federal poverty level are required to purchase health insurance either through an exchange or off the exchange. To qualify for federal subsidies, the purchase had to be from the exchange options. For everyone earning less than 138 percent of the federal poverty level, the federal-state Medicaid program was expanded to provide them with coverage.

In Nevada , 80,000 to 85,000 previously-uninsured people are covered under insurance plans provided through Nevada HealthLink, the exchange created for Nevada . Nevada has 636,625 people on the joint Federal-State Medicaid program. Before the 2014 implementation of the ACA, there were 332,560 Nevadans covered by Medicaid. With this growth, Nevada has had the second highest increase in its Medicaid caseload in the nation. As impressive as these numbers are, Nevada still has 11 percent uninsured. If the law is overturned or significantly weakened, there is every reason that the State’s uninsured population will return to the 21 percent facing the state in 2013, the year before the full implementation of the ACA.

The difference between who the ACA covers and who remains uninsured or underinsured has provided the opening for post-Obama Democrats to again discuss “Medicare-for-All” as more than a campaign debate issue.

Republicans have demonstrated the problems associated with a policy of tactical avoidance of the bothersome healthcare policy issue. For the last decade, Republican officials have appeared comfortable with a rhetorical response to healthcare coverage as they call for the “repeal and replacement” of “Obamacare”. This may have been sufficient political rhetoric over the last decade but appeared inadequate when the voters gave the Republicans control of the Presidency and Congress in 2016 and no legislation was adopted.

For Democrats, it is different. This is not a surprise since almost all polls indicate that most Democrats and Independents (and a growing number of Republicans) perceive “healthcare coverage” as one of the driving national policy issues that must be addressed. This has been true for Democrats since the 1930s.

This does seem to be a serious matter within the Democratic Party ranks. Recent polls for example show 60 percent approval of “Medicare-For-All” and 70 percent of voters view health care as a major issue in the next election. The Kaiser Family Foundation has placed online comparisons of the six “Medicare-for-All” proposals that have found their way to Congress, including an earlier version of Sen. Bernie Sanders proposal. It’s likely that each of the Democratic presidential campaigns, even those that oppose the approach, will develop positions on the key elements of such a “universal” or “single-payer” model. There is even a campaign site (http://www.medicareforall.org/pages/Home) for a nascent national effort that’s being developed on the subject.

Before we can understand what is involved in consideration of “Medicare-For-All”, it’s probably a good idea to discuss the federal Medicare program, which it proposes to expand. We need first to understand why there was a public demand for the Medicare program in the first place.

Prior to World War II, most Americans could afford to pay for the limited services that doctors and the health care system could provide to them. The modern inventions and discoveries in medical technology and pharmacology developed since World War II have been accompanied by significant expansion and specialization of knowledge in professional services. This has increased ability to provide life-saving and life lengthening healthcare and has also multiplied health care costs at alarming and unstoppable rates. As a result, most Americans have needed some third-party entity (either a public or private insurance carrier) to supplement their ability to cover individual health care costs. For the most part, that third party coverage has been provided through employers. In recent years, the public programs (Medicare and Medicaid) have grown as a result of the changing demographics of the nation as more people lack employment based coverage and as the population ages.

Demonstrating these realities, the Kaiser Family Foundation reported in 2017 that 49 percent of Americans were insured through their employment, 7 percent were individually insured (generally working in small business), 21 percent in Medicaid, 14 percent in Medicare and 9 percent uninsured. This was the high-water mark for previously uninsured people obtaining private and public coverage under the ACA. Nevada ’s numbers are quite similar to the national ones. In the same 2017 report 49 percent of Nevadans were insured through their employer, 5 percent were in non-group health plans, 19 percent in Medicaid, 14 percent in Medicare and 11 percent uninsured.

Medicare (and because of the ACA-Medicaid) have shown the greatest increases. It’s been 54 years since a Democratic president (Johnson) and a Democratic Congress passed the law creating the Federal Medicare program. Unlike the 2010 passage of the ACA, this was done with some Republican Congressional support. Former President Harry Truman received Medicare Card #1 at the event from which the epigraph above was delivered.

Medicare is a huge program and growing. Today, a total of 59.8 million Americans are covered for healthcare benefits by the Medicare program. According to the Kaiser Family Foundation, 519,060 Nevadans are Medicare beneficiaries. The huge “Baby-Boom” population (born before 1946 and 1964) is now moving into the Medicare program by the thousands every day. That’s everyone between the ages of 55-73 and that means that this population group will continue to flood into the Medicare program for another 10 years. Adding to the demographic challenges of this population is that some 56 percent of this population are women — resulting in a likely Medicare gender gap. Another large part of the boomer generation are aging immigrants. This means that the healthcare system disparities associated with gender, race and ethnicity are likely to be a driver in the future of Medicare policy.

Many of today’s Medicare beneficiaries were children or adolescents when the Medicare law was passed. They take Medicare, like Social Security (passed 30 years earlier in 1935), as permanent features of living in the United States . Medicare is the largest health care coverage program in the history of the world. Medicare is a federal government program that provides coverage benefits for seniors over 65, people with disabilities and people with “end stage renal disease” (kidney failure). These benefits are provided directly by health care providers who deliver services directly to card-carrying beneficiaries or through Federally contracted Medicare managed care plans. Most major national insurers work through State Insurance Commissioners to provide “Medicare Supplemental Insurance” plans that cover things not covered.

Medicare is supposed to be self-sustaining since it is funded by a mix of employee/employer contributions and beneficiary paid deductibles and co-payments. Increasingly, (now to nearly 50 percent) the federal treasury has had to provide annual subsidies. The Baby-Boom numbers indicate that these federal subsidies are likely to increase annually for some years. If I haven’t brought this point home yet, an estimated 86 percent of the $3 trillion spent annually on health care is spent on services for those with chronic conditions. Most Americans and most Nevadans with chronic conditions are contained in the 3 categories of the Medicare population (over 65 years of age, disabled or diagnosed with kidney failure), so Medicare is the principal payment source for chronic disease care. As the numbers of Medicare beneficiaries grow, so will the total costs to the Federal Government (i.e. federal taxpayers) to pay for chronic disease care.

Medicare is supposed to be self-sustaining since it is funded by a mix of employee/employer contributions and beneficiary paid deductibles and co-payments. Increasingly, (now to nearly 50 percent) the federal treasury has had to provide annual subsidies. The Baby-Boom numbers indicate that these federal subsidies are likely to increase annually for some years.

Can this program be expanded by an additional 272 million people using the basic framework for administration and funding? That will certainly be a key part of any debate about Medicare-for-All. We discussed poll data earlier. Significantly, an Associated Press-NORC poll finds that 60 percent of the U.S. population believes that government is responsible to assure health care coverage for all Americans. To a considerable degree the cost and complexity of health care seems to be bringing a number of Americans to conclude that the time for national acknowledgement of health care coverage has come and appear to agree with President Lincoln’s remarks quoted in the epigraph. If nothing else, it certainly should be an interesting discussion.

Larry Matheis is a retired health care executive and health policy analyst. Most recently he served as the Chief Executive Officer of the non-profit Nevada Medical Center. He was Executive Director of the Nevada State Medical Association for 25 years; served as the Nevada State Health Administrator responsible for the operations of the Nevada State Health Division (now the Nevada State Public and Behavioral Health Division); and, Executive Director of the nonprofit “Clark County Coalition Health Systems Agency”. He was a columnist on senior issues in the “ Las Vegas Review-Journal” for 3 years.

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