A Plan to Win Universal Health Care

Trumpcare is barbaric. Now is the time to redouble the fight for truly universal health care.
Timothy Faust
June 26, 2017
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Last week, the Republican-controlled Senate released its version of the American Health Care Act (AHCA). It is a brutal assault on Medicaid that would strip health insurance from untold millions. If the AHCA passes, people will die.

Now is the time to redouble the fight for truly universal health care in the United States. We must defeat Trumpcare, force the question into the 2018 midterm election, and make universal health care the definitive question of 2020.

There is a clear and urgent moral argument for universal health care, and you know it already: no one should be forced into poverty by illness. Every one of us has a civil right to life without the burdens of crippling medical debt. And in the wealthiest nation in the history of nations, we have the means to achieve this.

The clear and urgent argument for universal health care is also the most practical. The single-payer state is the only actor that bears the costs of providing health care and the costs of not providing health care. Why is it, then, that to speak the words “universal health care” aloud is to invite the worst ghouls in America — self-serving corporate insurance lobbyists, cruel neoconservative think-tankers, and the just plain craven — to rise up to oppose it?

Anyone who argues in 2017 that single-payer health care is unfeasible is either ignorant, malignant, depraved enough to rationalize profit from human suffering, or absent of the basic moral imagination to aspire to something better. Delivering care — performing surgery, diagnosing diseases, comforting the sick — is complicated. Paying for that care is simple.

But the craven and the cowardly will seize upon the first snag in the single-payer movement to validate their cold vision of the world. The Democrats and liberal pundits who tell us that single-payer will “never, ever come to pass” will take any trouble in its implementation as justification for their reluctance to fight. When we seize universal health care from corporate America, we must do it in such a way that those who would oppose its implementation have no option but to champion its success.

The fight for universal health care requires the normalization of aggressive price regulation and broad coverage expansion — a series of movements that both provide better care for as many people as possible while creating the political momentum that makes opposing single-payer politically unappealing.

Below I outline one such series of these reforms, which merges the successes of international health care movements and the capabilities of our own federal infrastructure. Here is a five-step process through which we can win universal health care in the United States.

1. Expand the federal and state health programs that already exist.

To understand the potential of Medicaid and Medicare and how they can be morphed into a single-payer program, we must understand the idea of the “risk pool.” It starts with a simple fact: caring for sick people is expensive, but most people are not sick. Of the people who are sick, most are less sick, and some are extremely sick.

In 2010, according to the Kaiser Family Foundation, over one-fifth of all American health care spending was concentrated in 1 percent of patients, the sickest of the sick, and half of all spending was concentrated in 5 percent of patients. Contrast that to the least expensive 50 percent, who accounted for less than 3 percent of total medical costs.

A risk pool is the group of sick people who need care and the healthy people whose contributions are used to pay for it. The larger the risk pool, and the higher the percentage of healthy people within it, the more sustainable it becomes.

In private insurance, the risk pool is the total mass of people covered by a given insurer. If the risk pool is sicker, higher care costs need to be met; per-person costs then increase, and insurers raise their premiums to preserve their profit margin.

In a universal health care system, the risk pool is composed of everyone — the healthy and the ill, the young and the elderly, the East Coast and the West Coast, the Badlands and the Deep South, from whom and to whom money flows to meet each others’ needs.

This universal risk pool is significantly more resilient than private ones. That pool is able to divide costs across a much larger number of people. Regional private insurance, meanwhile, can be shaken by even a single very sick person racking up millions of dollars of costs with a particularly complicated emergency.

Medicare and Medicaid were originally designed to liberate private insurers from needing to include the elderly and the poor, who are generally sicker than other people, from their risk pools. These programs can be used to give greater leverage to a future federal single-payer.

One crucial piece of such an expansion would be to expand Medicaid in states that have failed to do so since 2012. 2.6 million people, mostly in the South, live in states where the governor or state legislature has elected not to expand benefits using federal money. We must put the pressure on governors and state representatives, who as Medicaid administrators are more sensitive to local constituencies. They’re vulnerable — four Republican governors have spoken against the draconian American Health Care Act — and we must capitalize upon their Obama-era sins.

Another interesting idea, advanced by Matt Bruenig, is to expand Medicare to children and young adults under age twenty-six. This large demographic group is, for the most part, inexpensive. Adding them to Medicare rolls accomplishes two immediate and obvious tasks: one, it more than triples the size of the Medicare risk pool while adding relatively low incremental medical costs, thus driving overall per-capita Medicare spending down.

Two, since Medicare patients like Medicare more than the privately insured like private insurance, Medicare expansion builds a loyal constituency for federal health care. This is the core of the “Medicare for All” argument: a rejection of the myth that Americans hate federal services, a rejection of the idea that these services are bloated or inefficient, and a belief that enough people, given the choice between being jerked around by a private insurer that needs to minimize its costs and a properly calibrated public Medicare that can absorb them, will find the latter more appealing.

This natural extension of Lyndon Johnson’s “kiddie care” movement can show a vulnerable constituency a better vision of health care as they experience freedom from crushing premiums, challenges in in-network hospital selection, and out-of-pocket costs.

Most importantly, expanding Medicare to the young and healthy begins to disentangle health care from employment. Under the American health care model, one’s health and risk of crippling medical debt is dependent on one’s employer (and, in a post-Hobby Lobby v. Burwell world, an employer’s religious affiliations).

It is cruel that the poorest among us are coerced into remaining in unsafe or unjust working environments for fear of losing health care access; crueler still is that children’s health costs are shackled to the quality of their parents’ employer.

This is an invented problem. By severing health care access from employment, we reduce this cruelty and help reduce employers’ domination of workers.

2. Regulate prices.

In America, not only do we leave a quarter of our citizens unable to afford care — we also have runaway health care costs. Fortunately, these problems can be addressed at once: we can use a larger, more powerful Medicare to start the process of aggressive cost regulation to make care and medicine cheaper.

This is hardly a radical proposition. Every universal health care program across the globe depends upon national price regulation.

Almost all medical spending in the United States is derived as a function of Medicare costs. Your local hospital probably negotiates rates with insurance companies based on Medicare pricing — for example, a given procedure is billed at “3.4x Medicare” or “1.3x Medicare.” With 44 million members, Medicare is the largest health care payer in the United States.

This size gives the Centers for Medicare & Medicaid Services (CMS) tremendous leverage in negotiating prices. They can set a low price, and a large share of America’s providers and hospitals accept it because they don’t want to turn their backs on such an enormous group of people (and an enormous amount of money).

If we give Medicare broader, healthier membership with lower per-person costs, it will have even greater pricing leverage and should be able to exert strong downward pressure on health care costs throughout the country.

To best use this leverage, the Department of Health and Human Services needs to clean house and reduce Medicare’s dependence on the American Medical Association. The AMA, which purports to represent all doctors but more accurately represents only 15 percent of them, is a parasitic organization with unusual policy influence.

Every year, its Rules Update Committee assembles a list of recommended changes to Medicare reimbursement rates — often predicated on low-volume member surveys that amount to little more than pseudoscientific skulduggery. These are generally accepted wholesale by the Centers for Medicare and Medicaid Services.

In effect, every year the AMA compels CMS to approve higher prices for specialty procedures, then shifts the scope of procedures performed to maximize revenue — increasing the reimbursement rates of specialists like anesthesiologists while devaluing the work of front-line primary care providers.

An advocacy organization like the AMA should not determine the government’s payment rates for procedures. The group is a cartel. It is harmful to health care justice.

There is also the issue of pharmaceutical costs — surfaced most recently by the failure of Bernie Sanders’s Affordable and Safe Prescription Drug Importation Act. While drug prices compose 15 percent of annual health care spending, their excesses are ready in the minds of many Americans — abetted in the national imagination by the open greed of world-class asshole Martin Shkreli.

Only the “Big Four” federal programs are permitted to negotiate the cost of pharmaceuticals — the Department of State, Veterans’ Affairs, the Coast Guard, and Public Health Service. This is an invented problem and can be resolved with only a little political courage.

Reimportation of drugs originally manufactured in the United States then sent abroad is only a partial solution: instead, we must demand of our representatives that the federal government permit itself to negotiate drug prices. There is no justification — other than “shareholder interest” — for why Hepatitis C medications cost Medicaid $85,000, the Coast Guard $17,000, and $336 in India.

Pharmaceutical companies will claim they need their exorbitant margins to cover the cost of research and development and FDA approval. Why should public money be used to subsidize pharmaceutical companies’ corporate responsibilities? And if pharmaceuticals are so expensive to profit from without restricting access to them through high prices, shouldn’t we just nationalize the industry altogether?

3. Develop localized models of community health care.

With the foundations of a contemporary health care system in place, we finally have the opportunity to define what health care could look like across America.

The relationship between the federal government and state Medicaid officials provides a model for universal health care. The Social Security Act defines a list of requirements for every Medicaid program — coverage requirements, treated conditions, access — and state Medicaid programs must submit their plans to CMS, which affirms they meet federal criteria.

States can submit waivers to use federal funds to explore new models of care. Under a conservative federal administrator, these programs can be used to restrict care or impose barbaric punishments on the sick — like the proposed MacArthur amendment to the AHCA, which permits insurers to dramatically increase costs for people with preexisting conditions whose insurance lapses.

But under a sufficiently demanding set of federal requirements, prohibiting waiver projects from sloughing off their responsibilities to the entire enrollment in their state, Medicaid waivers let communities build public health care plans specific to their needs (one of the few times that “states’ rights” isn’t being screamed by doughy racists).

Some waivers are small and gentle — appropriating federal money to develop new ways of caring for the poor and elderly without institutionalizing them. Others are broad blueprints to a better world.

In Maryland, a waiver program leveraged state power to pay the dominant hospital system in the western, Appalachian part of the state a fixed annual income, contingent on providing care to all who sought it. Make your own profit margins, the state argued. The hospital complied, and set up primary care centers absent in its community.

Why does this matter? Because although primary care is invaluable in reducing health care costs, it’s a low-margin and high-volume service, so few people want to give it a shot outside of urban centers. By shifting more of their resources to primary care, this Maryland hospital provided more care to more people at a lower cost — residents were healthier, able to access better treatment more quickly, and expensive hospital admissions decreased.

This is a good model — a properly empowered state with a strict federal mandate to cover its citizens can bear down on its local providers and compel them to provide better care, for more people, for less money.

Health care is regional and will remain so for the foreseeable future. So let New York City develop the health care model that works for New York City; let rural Kentucky develop the health care model that works for rural Kentucky — and let the federal government enact strict and detailed standards of care which ensure that all enrollees are cared for across all programs, without exception.

4. Build a public option.

Opponents of the public option in the Affordable Care Act feared it might be too aggressive a competitor with insurance companies. They didn’t know the half of it.

It is reasonable to expect that people might be wary of joining a public option, especially considering the massive resistance from the insurance, pharmaceutical, and provider lobbies. But by now, after strong federal regulations and expansions to the risk pool have paved the way, there should be a body of evidence making it clear that the public option is preferable to paying premiums to private insurers.

At this point, the twenty-six-year-olds on Medicare will see the private options afforded to them after their next birthday and be eager for continuation of federal care. The larger, healthier Medicare population will have been an effective tool for aggressive cost regulation, and the more robust Medicaid program will have further developed the community relationships and local models of care. There is, at this point, a federal health care network that is effective, efficient, and humane — and it is ready for more members.

It is time to develop a public option to compete in the private insurance marketplace. Since the public option can use Medicare-negotiated prices, and is in the same risk pool as an expanded Medicare, overall per-person costs will be significantly lower than what private insurers can wrangle.

Of course, this needs funding — and it needs to prevent people from feeling shirked by paying into benefits they don’t receive. Thus, a public option must be created with an aggressive piece of legislation: remove the requirement for corporations to provide insurance for their employees and instead levy a corporate tax to pay for the public option.

Because per-person cost is lower under single-payer than private insurance, overall cost to corporations under this approach is less than what they currently pay to cover their employees, without the shell games involved in finding ways to deny employee coverage. And more importantly, employees will be freed from employer coverage (which, since it covers a smaller risk pool, more often than not comes with stringent deductibles and challenging premiums).

5. Outcompete and nationalize.

The neoliberal insistence on letting the private market dictate health care in America rebels against government intervention — except when that intervention (like removing the elderly and poor from risk pools) made it easier for insurers and providers to reap a profit. It is ironic, but just, that the single-payer movement uses that same market to beat the private insurers at their own game.

The administrative functions of the insurance industry are legitimate and essential even to a federal single-payer program, and a healthy public option with a large, diverse risk pool and federal price regulation will annihilate any private insurer who contests it.

A cowed insurance industry would then be ripe for nationalization.

As Enrique Diaz-Alvarez has argued, nationalizing a weakened insurer is cost-efficient and essential. After ingesting the software architecture and claims and billing processes of the insurance industry, and dissolving the $375 billion in unnecessary annual costs from our current duplicative, multi-payer system, the dream will become real: we will have a comprehensive, universal federal-payer system.

There will still be work to do — obvious next steps include removing redundancies across the three federal programs — but finally, we will have a national health care program, the beginning of a universal risk pool, and an end to our long national pastime of humiliation and degradation of people’s health for corporate profit.

The sun is setting on America’s half-century-long experiment in punishing the sick. A single-payer program is within reach. Even as their elected officials deny it, Americans demand it. But single-payer is not the goal in and of itself — instead, we must work toward a future where our aggregate resources and capabilities provide for all Americans’ fundamental needs.

Housing is health care. Food is health care. These are the social determinants of health, and the work of realizing them — the work of striving for health justice — can only begin after we’ve created the universal risk pool and single-payer mechanism.

The evolution of American private insurance is rooted in the cruel ideology of “individual accountability” and atomized personal isolation. It is unconscionable, it is barbaric, and it must be exorcised from our national myth. We can build a system in which no one is torn apart by medical bankruptcy or unable to afford care. Let’s do it right now.

 

July 1, 2017