Tag Archives: Affordable Care Act

Bernie Sanders-Style Health Care Would Be a Big Win for Low- and Middle-Income Americans

Bernie Sanders just released his new proposal for a single-payer health care system.  As former US Labor Secretary Rob Reich notes, Sanders’ plan would be “a huge advance over what we have now.”  Reich’s summary:

It builds on the strengths of Medicare. Like Medicare, it’s universal — separating health insurance from employment, and enabling people to choose a health care provider without worrying about whether that provider is in-network: All they’d need do is go to the doctor and show their insurance card. No more copays, no more deductibles and no more fighting with insurance companies when they fail to pay for charges.

Through a single national insurance system, we’ll no longer be paying for the marketing and advertising of private for-profit health insurers, nor their giant executive salaries, or their complex billing systems. Government will negotiate fair prices with drug companies, hospitals, and medical suppliers.

The plan’s release came right before the fourth Democratic debate and after a week of attacks from the Hillary Clinton campaign, which had been simultaneously complaining about not having plan details and distorting the details of a similar proposal Sanders introduced in the Senate in 2013.  Even those sympathetic to Clinton have labeled these attacks “questionable” or “genuinely strange,” while those willing to more accurately describe her team’s “GOP fear tactics” have noted that they are “wildly misleading,” “flagrantly mischaracterizing,” “mostly false,” “nonsense,” “disingenuous,” “stupid,” and “dishonest.”  Sanders’ plan would expand Medicare, not “dismantle” it; cover more people, not “strip millions” from coverage; ensure that insurance is provided in every state, not “empower” governors to “take [it] away;” and save most Americans lots of money, not “cost” them.

That last point in particular deserves more emphasis, as it’s one about which Clinton appears to have been lying outright.  Speaking to George Stephanopolous about single-payer health care on Wednesday, January 13, Clinton said: “Every analysis that I’m aware of shows it’s going to cost middle-class families and working families.”  Yet I have never seen such an analysis, and every analysis I am aware of says the exact opposite: that most families would gain big from a switch to a Sanders-style health care system (as Sanders explained at the debate, their savings from not having to pay premiums anymore would outweigh any increased taxes they would have to pay to fund the program).

Consider, for example, a 2013 analysis of the Expanded and Improved Medicare For All Act from UMass-Amherst economist Gerald Friedman.  Physicians for a National Health Program called this bill and Sanders’ old plan (which, despite Clinton’s suggestion to the contrary at the debate, is not all that different from his new one) “simply two expressions of the one single payer concept;” Clinton spokesman Brian Fallon agreed that the two bills were “similar” in a recent interview.  As shown in the graph below, Friedman estimated that everyone in the bottom 95% would see their after-tax incomes rise under such a proposal.  Fallon is clearly familiar with this analysis – he selectively referenced parts of it in the interview linked above – and it’s been the most common citation for cost estimates that Clinton herself has used; it’s near impossible to believe that Clinton was not “aware of” it.

Friedman HR 676

Distributional analysis, from UMass-Amherst economist Gerald Friedman, of a 2013 proposal for single-payer health care.

Friedman now estimates that, “[f]or a middle-class family of four with an income from wages of $50,000 and an employer-provided family plan of an average price, the Sanders program would save $5,807, or 12% of income.”  Similarly, the Sanders campaign had previously estimated that his old plan would have saved a typical family between $3,855 and $5,173.  PolitiFact argued that employers might respond to the financing scheme in that plan by reducing workers’ paychecks, but still estimated, even under pessimistic assumptions, that “the average family would save $505 to $1,823 a year.”

There have also been analyses of proposed state-level single-payer health care plans.  A proposal in Vermont in 2001 would have saved an estimated $995 on average for families making between $50,000 and $75,000 a year, while a proposal in California in 2006 would have saved families in that same income range an estimated average of $2,942 (the poorest families – those making less than $10,000 a year – would have saved an estimated average of $608 in both states).

Each of these analyses indicates that Bernie Sanders-style single-payer health care is a major win for low- and middle-income Americans.  It’s theoretically possible that Clinton both isn’t “aware of” any of them and that she and Fallon are sitting on credible analyses that say something different, but I’d give that possibility much lower odds than Martin O’Malley winning the Democratic nomination.  And while Clinton shifted gears slightly at the debate in response to Sanders’ new plan, many of her comments, like the assertions that Sanders would “tear [the Affordable Care Act] up” and that Democrats “couldn’t get the votes for” a public option during the ACA debate, were still extremely misleading.

This conversation about single-payer health care has become a perfect window into the choice facing Democratic primary voters.  After receiving millions of dollars from the health insurance industry, Hillary Clinton no longer supports the type of truly universal health care coverage she backed in the early 1990s.  Instead, she has attacked Bernie Sanders’ support of such a plan with very similar tactics to those she herself decried in 2008 as “right out of Karl Rove’s playbook” (see video below).  These attacks, besides being dishonest, undermine key Democratic values.

On the other hand, Bernie Sanders has a consistent record of fighting for those values.  He rejects money from special interests and believes, as his new proposal reiterates and he said at the debate, that health care is a right that “should be available to all of our people.”  As he also pointed out, the real question isn’t whether single-payer health care is desirable – it’s quite clearly “a pretty good deal.”  The more pertinent question is “whether we have the guts to stand up to the private insurance companies and all of their money, and the pharmaceutical industry.”

Sanders certainly does.  Let’s hope the voters choose wisely.

Update (5/29/16): The Tax Policy Center issued an analysis of Sanders’ overall proposals on May 9.  While headlines have tended to focus on their estimates of how much the plan would increase the national debt – estimates which other analysts sharply dispute – less attention has been paid to the fact that the Tax Policy Center also found, consistent with every other analysis above, that Sanders’ plans would bring large benefits for low- and middle-income families.

Sanders Tax and Transfer Distributional Analysis.png

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Filed under 2016 Presidential Election, Medicine

It’s Not What Employers Are Doing, But What They Can Do, That Matters

A few days ago, Buzzfeed reported that Staples, the large office supply chain, had stepped up its enforcement of a cap on hours worked for part-time employees. Despite the company’s unconvincing claim* that the policy is longstanding, it appears that Staples implemented the 25-hour-per-week cap in January of 2014 “to skirt impending rules requiring companies to provide health insurance” to employees who work at least 30 hours a week.

Staples' original memo to store managers, as published by Buzzfeed.

Staples’ original memo to store managers, as published by Buzzfeed.

Staples’ decision will undoubtedly renew arguments that the Affordable Care Act’s (ACA’s) employer mandate – the provision that requires companies with more than 50 full-time workers to insure employees who work at least 30 hours each week – has led to harmful effects on work. These arguments, like parallel narratives about minimum wage laws and paid sick leave ordinances, are largely inaccurate, and advocates of evidence-based, power-balancing policy are absolutely right to debunk them.

However, we cede too much when, as is often the case, we default to a defensive stance. “Yes, the negative incentive is there, but the data show such effects to be small or non-existent” should not be the full scope of our response.

Instead, it’s imperative that we change the nature of these conversations. As Thomas Pynchon astutely observed: “If they can get you asking the wrong questions, they don’t have to worry about answers.”

Opponents of an employer mandate, minimum wage, and paid sick leave want people to focus on what employers will do in response to each policy’s enactment. The more relevant question, however, is about what employers can do.

First, it’s important to remember that businesses can deduct employer-provided benefits from their tax bills, and that the employer contribution to health benefits is widely viewed as coming out of worker salaries. Providing employees with health coverage, decent wages, and paid sick leave costs less money than a lot of people think, though it’s certainly more expensive than offering meager wages and no benefits.

More importantly, providing such benefits is the right thing to do. And it is undeniable that a typical business, when confronted with the prospect of labor cost increases, has numerous options. The business can explore ways to improve its productivity. It can raise its prices. It can reduce the salaries of affluent executives, or maybe make a little bit less in profits.**

In the most recent quarter for which financial information is available, August through October of 2014, Staples made $216 million in after-tax profits. Their CEO, Ronald Sargeant, made over $10 million in total compensation in 2013, while other top executives raked in well over $2 million apiece. Barack Obama didn’t have those numbers when he was asked about Staples’ policy a few days ago, but his suspicion “that [Staples] could well afford to treat their workers favorably and give them some basic financial security” was clearly right on the money. The ACA didn’t make Staples cut its employees’ part-time hours; instead, Staples management consciously chose to prioritize a fifth car or third house for a few wealthy individuals over its part-time workers’ ability to put food on the table. Other large companies, from Starbucks to McDonald’s to Walmart, make similar callous choices on a range of issues all the time.

There are two ways to address this problem. The main mechanism currently at our disposal is to loudly call such decision-making what it is – greedy and unethical – and vote with our dollars for companies that treat their workers fairly. Opponents of labor standards focus on what businesses will do rather than what they can do in part because we let them avoid moral reckoning. We won’t win everyone over, but we must not underestimate the power that moral authority has to shape behavior.

The second mechanism is policy that addresses firms’ decision-making. Some recent legislative proposals, in fact, like Congressman Chris Van Hollen’s CEO-Employee Fairness Act, have the potential to begin to wade into these sorts of waters. If we’re worried that companies will choose to lay people off in response to a minimum wage increase, for example, we could raise taxes on the executives of companies that make this choice.

No matter the policy outcomes, it’s essential that we ask the right questions in these debates. It’s worthwhile and important to document the evidence that policies like the employer mandate, minimum wage, and paid sick leave have minimal consequences on work. But it’s also essential to point out that any consequences these policies do have aren’t inevitable.

*As Buzzfeed’s original coverage explained, Staples claims that their part-time hours policy has been in effect for over ten years, and that the memo Buzzfeed obtained only “reiterated the policy.” Yet the memo contained phrases like, “Beginning with the week ending 1/4/2014,” and “Staples is implementing a policy.” A Staples spokesperson did not respond to follow-up questions about the memo’s language.

**It’s possible, though I’ve never seen a study to prove it, that some businesses actually can’t afford to adequately compensate their workers, that they’re barely squeaking by as is with low executive salaries, non-existent profits, and the highest level of productivity they can possibly attain. To the extent these businesses exist – and I’m skeptical that many of them do – it’s worth asking whether a business’s right to keep its doors open should trump its workers’ right to make enough to provide for their families. I don’t believe it should.

Note: A version of this post appeared in The Huffington Post on February 16.

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Filed under Business