Tag Archives: Medicare For All

On Both Politics and Policy, “For All” Beats “For Some”

Medicare for All or Medicare for All Who Want It? Free college for all or free college for just the non-rich? The debate between universal (available to everyone) and means-tested (available only to those who meet certain criteria) programs has defined the Democratic primary. Bernie Sanders, often joined by Elizabeth Warren, argues for universalism, declaring education and health care to be basic human rights. Amy Klobuchar, Pete Buttigieg, and Joe Biden argue against, contending that government resources must be targeted only to those in need, rather than wasted on the rich and/or on those who ostensibly don’t want them.

On the most commonly cited rationale for each position – sustainability for universalists and resource constraints for means testers – proponents of universalism have the upper hand. Medicare and Social Security, two of the United States’s largest, most successful, and most popular programs, are as close to universal as we’ve got. By giving everyone a stake in these programs, proponents argue, their near-universality has insulated them from attack. Bob Greenstein (the President of the Center on Budget and Policy Priorities, where I used to work) points out both that these programs have been cut and that their popularity could conceivably be due to the perception that they’re tied to work rather than to their quasi-universal nature, but the Alaska Permanent Fund, a state-level universal program not tied to work, also enjoys overwhelming public support. So do universal programs that aren’t tied to work in other countries – other countries’ universal health care systems, for instance, are way more popular than our means-tested approach. It’s reasonable to expect a universal program to be more sustainable than a means-tested alternative over time.

The Buttigieges of the world counter that universal programs are too expensive; in December, for instance, Buttigieg said they would require “the kind of taxation that economists tell us could hurt the economy.” But even if you reject the notion that government spending can be substantially increased without raising taxes, concerns about higher taxes are entirely without merit. Research has consistently (and predictably) failed to support such concerns, the United States has significantly lower taxes than the rest of the developed world, and scores of reputable economists support tax proposals, like those Sanders and Warren have released, that can fund the universal programs on offer. When Buttigieg says he’d prefer to “save those dollars [that would otherwise be spent on free college] for something else,” he is presenting a false choice. It is only his and others’ political preferences, not actual resource constraints, that stand between us and full funding of all the priorities he listed: education, infrastructure, child care, housing, and health care.

Still, the most compelling case for universal programs isn’t political. It is, ironically, that they’re better at achieving two of means testing’s major goals: helping people in need and doing so efficiently. They reduce stigma, arbitrariness, usage barriers, and administrative costs.

Universal programs help people in need by reducing stigma

Most low-income people work incredibly hard to put roofs over their heads and food on their tables. Yet they’re constantly accused of being unskilled, lazy, good-for-nothing loafers in search of government handouts. Afraid of being perceived that way and/or ashamed of their economic situation, many people who are struggling to get by decide not to access the means-tested benefits to which they’re entitled. They’d rather go hungry than risk someone catching them using food stamps in the checkout line.

Correcting false stereotypes is a top priority, with universal programs a useful complement for improving the experience of people in need. If everyone received SNAP benefits (SNAP, which stands for Supplemental Nutrition Assistance Program, is the contemporary name for the food stamp program), for example, using them would no longer identify someone as low-income. We would thus expect higher rates of SNAP usage among low-income people.

That’s exactly what we’ve seen with the school meals program following the introduction of a program called “community eligibility,” which enables schools and school districts with a certain percentage of low-income students to offer free school meals to all students – regardless of their income levels – free of charge. Research suggests that reduced stigma is at least part of the reason students at schools that have adopted this program are more likely to take advantage of school breakfast and lunch programs.

Universal programs help people in need by eliminating arbitrary cutoffs

For SNAP, the income eligibility threshold is 130% of the poverty line, or about $27,700 annually for a family of three. People who make less than that amount (provided they meet other requirements – SNAP also has an asset test and restrictive eligibility rules for various groups of people including immigrants, individuals aged 18 to 49 who don’t have children, and students) can access benefits; people who make more than that amount cannot. Under Buttigieg’s higher education plan, college is free only for families making less than $100,000 a year (and discounted for families making between $100,000 and $150,000).

Means-tested benefits typically phase out slowly – that is, benefits get gradually smaller as beneficiary income gets higher – to ensure that the sum of pay plus benefits continues to increase when people pass eligibility thresholds. But why shouldn’t a family of three making $30,000 a year get food assistance? Why should $100,001 be the level at which a family starts having to pay for college? Eligibility thresholds in means-tested programs are arbitrary and inevitably create strange, difficult-to-justify divides between people right above and right below them. Universal programs avoid this problem completely by providing the same benefit to everyone.

Universal programs help people in need by reducing usage barriers

Means testing requires some form of testing, as the name implies, to determine whether or not someone is eligible for benefits. Depending on the complexity of a program’s eligibility rules, that testing might require a form of identification, proof of residence, proof of income, or any number of other things. Eligible beneficiaries may need to mail, hand-deliver, or electronically submit one or more forms, which, as Sanders accurately observed during the December debate, “people are sick and tired of filling out.

Filling out forms and proving eligibility is much more than an annoyance for many eligible people in need. Some may not know how to read or write. Some may move and/or change jobs frequently. Some may lack an official ID. The more hoops people have to jump through to access benefits, the fewer eligible people will actually end up receiving benefits.

Government agencies can mitigate this problem with outreach efforts and assistance programs, of course. But even well-administered means-tested programs like SNAP that continue to improve in these areas don’t catch everyone they should, in part because of the access barriers means testing inherently creates – in 2016, the most recent year for which we have data, about 15% of people eligible for SNAP did not participate in the program.

Universal programs improve efficiency by reducing administrative costs

In addition to creating an obstacle for eligible beneficiaries, the complexity introduced by means testing presents a challenge for efficient government. Every form that needs to be filled out has to be processed. Eligibility has to be verified. Complex rules have to be actively managed. Means-tested programs spend a larger share of their money on administrative overhead than universal programs do.

Administrative costs for Social Security, for example, are only 0.7% of total expenses. For SNAP, one of the most efficient and effective means-tested government programs, administrative spending comprises 7.7% of its total budget. Over three-quarters of those administrative costs are “certification-related,” meaning they’re “associated with determining household eligibility.”

To be clear, the overall cost of SNAP and other means-tested programs would be many times higher, even with substantially reduced overhead costs, if they were more universal. Increased overall cost is the only real potential downside of universality. And if one were forced to choose between increasing benefits for people in need and extending benefits to higher-income people who don’t currently receive them, increasing benefits for people in need would be the clearly correct choice.

But as noted above, that choice is a false one. There is no question that the US government has the money to offer increased benefits through universal programs. The only question is whether we will choose to spend it on the worthy goals of helping people in need and improving government efficiency for everyone.

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Filed under 2020 Election, Education, Health Care and Medicine, Poverty and the Justice System, US Political System

How Mainstream News Coverage Distorts the Policy, Politics, and Polling on Medicare For All

Jonathan Martin and Abby Goodnough discuss a brewing Democratic Party debate about Medicare For All in The New York Times. Does it mean a single-payer system in which the government covers everyone’s health care costs? Or is it just rhetoric intended to mean “I support a better health care system” without a commitment to challenging insurance industry power?

Martin and Goodnough helpfully note that only one of the five likely 2020 presidential candidates they discuss* is committed to a single-payer system: Bernie Sanders. But their article is also misleading in its discussion of Medicare For All policy, politics, and polling. Their errors are all too common in news articles and anyone wishing to responsibly cover politics over the next few years needs to correct them.

First, when it comes to the policy implications of Medicare For All, Martin and Goodnough characterize single-payer health care as a system “in which many would lose their current insurance options and pay higher taxes.” They fail to mention that the policy replaces people’s “current insurance options” with more expansive coverage that (under Sanders’ plan) eliminates premiums, copays, and deductibles. As pretty much every distributional analysis of proposed single-payer plans show, the vast majority of people will pay substantially less money in taxes plus health care costs under Medicare For All than they currently pay. The omission of these details is akin to implying Martin should have felt “uneasy” about losing his health insurance options and paying higher taxes in 2013 – without mentioning that he was replacing his insurance and making a higher income by moving from Politico to The New York Times.

sanders-tax-and-transfer-distributional-analysis

Similarly, in an attempt to support Michael Bloomberg’s claim that single-payer health care will “bankrupt” America, Martin and Goodnough cite a study from the Mercatus Center that “predicted [Sanders’ plan] would increase federal spending by at least $32.6 trillion over the first decade.” That study also predicted that combined private and public spending on health care in the United States – the most important number in health care cost estimates – would fall by $2 trillion, but Martin and Goodnough don’t mention that fact. As Matt Bruenig has documented extensively, it’s hard to read the numbers in the Mercatus report as anything other than an endorsement of Sanders’ plan.

Mercatus doesn’t want us to read their study that way, which brings us to the second way in which the Times article is misleading. Martin and Goodnough describe Mercatus as the “Mercatus Center of George Mason University,” giving it the imprimatur of impartial academic institution, when Mercatus is in reality a Right-wing think tank funded by the Koch family foundations. This neutral description is inconsistent with how the Times news pages describe other think tanks – they routinely call my old employer, the Center on Budget and Policy Priorities, “liberal” or “liberal-leaning” – and erroneously suggests to the reader that the concerns Mercatus raises come from an objective source.

Martin and Goodnough fail to provide key context for other political opinions, too. They write about how “moderates believe” that Medicare For All will “frighten” an important crop of general election voters, for example, but don’t note that these moderates have been consistently wrong about what voters care about. If there’s any lesson to learn from the 2016 election result, it’s that people’s beliefs about what makes politicians electable should be discounted – especially the beliefs of people who ignored electability evidence the last time around.

Third, Martin and Goodnough cherry-pick the Medicare For All polling data that makes their preferred case. They acknowledge that the term itself “has broad public support,” but they highlight how support for the policy drops “when people hear that it would eliminate insurance companies or that it would require Americans to pay more in taxes.” A result from the same poll that goes unmentioned? That support for the policy rises when people hear that it would “guarantee health insurance as a right for all Americans” or “eliminate all health insurance premiums and reduce out-of-pocket health care costs for most Americans.” Martin and Goodnough also cite a Gallup poll finding that “70 percent of Americans with private insurance rate their coverage as ‘excellent’ or ‘good’” without pointing out that the number jumps to 79 percent for Americans on Medicare or Medicaid.

What Martin and Goodnough get right is that “attitudes [about Medicare For All] swing significantly depending on…the details.” If you tell people that the policy will result in them losing their current insurance, paying higher taxes, and interacting with a bankrupt federal government, they’re less likely to support it. If you tell people the truth, however – that public insurance in the United States is well-liked and more cost-efficient than private insurance, that other countries with Medicare-For-All-type systems spend way less money while covering a much higher percentage of their populations than we do, and that, under a Medicare For All system, all but the richest among us will get better coverage while paying less than they do today – people are fully on board. We need our news media to start telling the truth.

*Update (2/4/19): Thanks to a reader comment, I updated this sentence post-publication to clarify that the Times did not discuss every likely 2020 candidate. Tulsi Gabbard, for example, may also be committed to a true single-payer system.

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Filed under 2020 Election, Health Care and Medicine, Media, US Political System

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 Election, Health Care and Medicine