How Biden Could Usher in an Aggressive Health Care Policy

He rejected Medicare for All but the pandemic has some Democrats calling for a more active role for the government in health care.

By
33

Good morning and welcome to “The Biden Agenda.” For the past several weeks, we’ve invited some of the smartest thinkers and subject-matter experts we know to contribute to what will become an occasional series on what a Biden presidency might look like. 

The idea is simple: Based on Biden’s long career, the views he’s articulated in his low-key campaign for president, the people he’s likely to rely on for advice, and the current political moment, what should we expect from a prospective Biden presidency on the most pressing issues of our time? We’ve asked contributors to assume a Biden presidency and provide for readers an idea of what to expect. 

While polling today points to a Biden presidency as likely—the forecast from modeling created by The Economist puts the odds at roughly 9 in 10—such polling is necessarily a just snapshot. There are reasons to believe the polls will tighten over the final three months of the presidential contest and externalities can produce rapid and significant change to current trends. We will continue our in-depth reporting and analysis of the Trump presidency and a prospective second term as part of our ongoing coverage. 

The first piece comes from Jim Capretta, one of the country’s leading experts on health care, entitlements, budgets and fiscal policy. Capretta holds the Milton Friedman chair at the American Enterprise Institute and serves as an adviser to the Bipartisan Policy Center. 

Joe Biden—slayer of Medicare for All—saved Democrats from a painful, self-inflicted wound. If a candidate supporting single-payer had won the nomination, the party would be pulling out all of the stops to get it enacted in 2021, and almost certainly would fail even if the candidate won the presidency in November. As things stand, Biden’s nomination allows Democrats to champion more realistic and politically palatable changes that move in the same direction. The COVID-19 pandemic is providing new momentum for such an agenda. 

Keep reading with a free account
Create a free Dispatch account to keep reading Get Started ALREADY HAVE AN ACCOUNT? SIGN IN
33
By
Comments (33)
Join The Dispatch to participate in the comments.
 
  1. CatoTheElder

    Okay, first of all, folks, let’s look at just a few numbers. And you might wanna sit down, because they’re gonna be big, and you might be surprised.

    I’m not gonna take this remark too far; I’m just gonna kinda set it on the table and let everyone look at it.

    According to the Centers for Medicare and Medicaid Services (CMS, the federal agency that runs Medicare and, from the federal side, provides Medicaid dollars to the states), as of 2018, the United States spent—get ready—17.7% of the GDP on health care. That works out to a bit more than $11,000 per person, and—get really ready for this—some $3.2 trillion per year.

    Elizabeth Warren and Bernie Sanders have been castigated, criticized, lampooned, ridiculed, demonized, etc., etc. for proposing that the nation move to a Medicare for All system which would ensure health care for everyone, not tied to one’s employer, but at a cost of, yes, we’ve all heard it, $30 trillion over 10 years.

    Now, I’m going to assume that most readers of The Dispatch mastered 7th grade mathematics. So, when I say that if one simply assumes static health care expenditures at current (2018) rates, as per CMS—and yes, I know that assumption is likely to be significantly off, on the low end—we can take that $3.2 trillion/year, multiply by ten years, and arrive at a low-ball estimate of $32 trillion that the nation will be spending over the next ten years for health care, even if we change nothing, add little to no new technology or drugs, etc.

    If we’re already on course to spend more than $30 trillion over the next decade for health care, why in tarnation are we shocked—shocked—to find people in the establishment proposing a health-care-for-all plan that would cost the same?

    Collapse
    1. CatoTheElder

      And an addendum: I noted above that the U.S. spends 17-18% of GDP on health care, with the percentage generally slowly climbing. This is a huge amount compared to...well, just about everywhere else in the world.

      For comparison, OECD data (https://data.oecd.org/healthres/health-spending.htm)
      National expenditures on health care, %GDP, 2019 or latest year available

      U.S. 17.0
      Canada 10.8
      Denmark 10.0
      Germany 11.7
      France 11.2
      Australia 9.3
      Japan 11.0
      UK 10.3
      OECD ave 8.8

      I selected mostly countries with which we might wish usefully to compare ourselves. When it comes to statistics like life expectancy, infant mortality, cardiovascular disease survival rates, cancer survival rates, etc., all of the nations listed have outcomes more or less on par with ours, or better. (https://www.healthsystemtracker.org/chart-collection/quality-u-s-healthcare-system-compare-countries/#item-start) All spend significantly less than we do, per capita, on health care. Japan, with a greatly aged population, still spends about 35% per capita on health care than we do. Denmark, according to Forbes magazine the second-happiest of the 20 happiest countries in the world, spends 10% of GDP—more than 40% less than the US—on health care. (Finland came in first in the happiest nation list for the 7th year in a row; they spend 9.1% of GDP on health care. For what it’s worth, the US, which spends more than any other developed nation on health care, per capita, is only 18th on the list of happiest nations.)

      And when it comes to satisfaction with their health care, persons in most if not all developed countries are at least as pleased with their health care as are persons in the US.

      Let’s just let that sit and percolate through the ol’ cerebral cortex for a bit....

      Collapse
      1. CatoTheElder

        Corrigendum: Japan spends 35% less per capita...

        Collapse
  2. Ian Smith

    Enjoyed the article.

    FWIW, I'd like to nitpick with one point in the article. "Government run" healthcare does not imply public provision of the service. The "Government run" slogan is one that the GOP has been pushing for years to try to frighten consumers who are wary of the government's ability to execute (and perhaps rightly so). Government run systems can be based on private providers with the government providing a fixed amount--usually from a table published yearly--and the private provider can charge whatever they like, with the customer paying the difference. This scheme allows for private health insurance to work as well, since that insurance can be used to pay the _difference_ between the government rate and a particular provider's rate.

    Sadly, the attack ads write themselves: This "government run" scheme with private providers and private insurance is the one used by ..... France.

    Collapse
  3. Avatar photo
    Doug Mitchell

    If Biden wins a majority, likely the best thing he could do for the economy, given the entirety of his agenda, is expansion of medicare eligibility. The consequent wholesale retirement/firing of higher compensated employees, replaced by younger people working for less, would help bail the nation out of the unemployment and economic malaise that will surely follow a Democrat majority election.

    Collapse
  4. Avatar photo
    Pat Riot

    When talking about health care/heath insurance in the USA, the first principle to start with is this: we take care of everybody.

    And no, I am not being prescriptive here, I am being *descriptive*: right now, and for the last 50 years, if you showed up at a hospital with a dire ailment, you would get treatment regardless of your ability to pay.

    You can argue whether that's a good thing or not--whether we should all live in Galt's Gulch or not--but it's really pretty pointless: that's the way it has been, and there is zero appetite to change that anywhere.

    If you understand the implications of that principle, you see that, like it or not, we reward carelessness and short-sightedness in our society. In short, a young person can simply not buy insurance at all and know that they will be more or less fine no matter what happens.

    Now understand another critical pillar of the health care situation in the USA: it's 1/6th of our economy, and two multiplying factors are going to ensure it's a much greater percentage in the future. Those factors are increasing technology (better treatments and drugs) and longer lifespans. (And oh yeah, those are generally *really good things* as a whole).

    These two factors mean there are going to be more old people because they will live longer, and people will be *more comfortable* because of medical advances, but those advances cost even more money, often requiring decades of expensive maintenance.

    In other words, today a diabetic is connected to an expensive high-tech box that constantly monitors their blood and gives them medicine at the proper time allowing them to live a long and basically normal life, as opposed to the good old days when they would, you know, just die young.

    This is important to understand because while it's true our system could be made more efficient in a lot of ways, the fundamentals of why health care will consume an increasing percentage of our GDP will not change no matter what we do.

    With these fundamentals in place, you can derive some other important truths:

    1. There's no chance old people could be put in their own insurance pool and possibly be expected to afford it: younger people must pay into the system when they are relatively healthy.

    2. Any sort of voluntary system means that younger people can just freeload without any adverse effects.

    3. Thus universal coverage is (however achieved be it public, private or both), overall, the *cheapest* solution since we cover people anyhow just in a really inefficient way.

    Given that people vary in their abilities to produce incomes, and again, I can't emphasize this enough, *given that we treat all people equally in our actual health care system* (e.g. we treat the dying in front at the hospital regardless), then it follows that the only solution to this is some kind of compelled scheme be it taxes for a public system or a mandate to pay for your insurance if you can afford it.

    Those are the fundamentals to a rational health care system. From there you can argue for a million different variants with pro and con arguments, but they only have merit if they stay within the bounds of the fundamentals.


    Collapse
    1. Mary Stine

      Well said Pat!..As a small business co-owner for over 40 years I can attest that young people not only won't pay anything for health insurance, or even preventive care, but feel "someone else" should pay for all their prescriptions! I had employees who resented a $20.00 copay. And it was not just the young.. for many people taking care of their health is at the very bottom of their important budget considerations. Probably a lot of that is owing to what you describe, but I think the overall attitude is one of avoiding personal responsibility for one's own body and health. Too many of us Americans believe in the myth of the magic pill/drug that will "fix" us.
      And that may be a real danger with Covid.

      Collapse
    2. Avatar photo
      Joe149

      Nicely argued. I agree with the truths, as well as the prescription. I would comment that our current system, while it (medically) treats all more or less equally, the ramifications of not having insurance can be dire. A large percentage of bankruptcies in this country are medical-expense related. And, to be pedantic, it's important to point out that, what someone without insurance will get is 'stabilization' not really full treatment. Hospitals regularly discharge stable patients who would be much better off with continued treatment. But as I said, I like the way you presented it.

      To me the most galling factor of our system, even if your prescriptions were to be enacted (we can hope!) is the difference in what we pay as a country, and what other comparable countries pay. We are at more than 17% GDP, while Germany (which has a system much like what you describe) is around 10%. Canada around 11%. That difference is more than enough to fund our entire military!
      So just sorting out the insurance issue is not enough. To be able to afford what that insurance would cost requires us to examine the basic structure and financial incentives that define our system. A tall order, and one reason the single-payer folks push their solution - it would eventually solve both problems at once.

      Collapse
      1. Avatar photo
        Pat Riot

        I get that not having insurance is bad at the margin, and I was painting with a large brush there. At the end of the day, young people can easily convince themselves not to pay for insurance if they were given that choice, and millions would if they could.

        While I wouldn't use absolute values--because I think health care as a percentage of GDP is going to go up for all of the developed countries--it's certainly the case that our current system throws money out the window by the trillions.

        The *cheapest* solution is universal coverage of some kind. That's the counter-intuitive thing a lot of people don't understand.

        I personally don't have a dog in the hunt for single-payer or an ACA-like approach, but MFA is definitely a non-starter since it's based on Medicare, which is itself part of the problem (i.e. it's essentially subsidized by private insurance a roundabout and inefficient way).

        Collapse
    3. Mary

      Bravo Pat! My everlasting frustration in this debate is how “we” (the public at large) NEVER address the first principles. If we are not willing to have carts roaming the streets with drivers calling “bring out your dead” ala The Holy Grail (one of the greatest movies of all time....Monty Python, to be expected), where do we want to start? Science has extended life on both ends of the spectrum. Neo-Natal care is capable of saving life from 24 weeks, and geriatric care is capable of extending life beyond what is “normal”. Those really hard conversations are ones that we, as a nation, do NOT want to have and so it comes down to luck and money! If you are lucky (good genetics and accident free) or if you are wealthy, you win! If you are neither of those, sorry for your bad luck, thanks for playing?
      Again, great post!

      Collapse
  5. Tommy

    Government shouldn't control any aspect of health care except for the licensing of health care providers and pharmaceuticals.

    Likewise, Americans should have the freedom to contract with others to obtain insurance policies to reduce their financial risks in any manner they want, provided that the contract wasn't procured by force or fraud.

    The government shouldn't mandate the terms of insurance coverage, nor should it mandate policy premiums which are just re-distribution of wealth in disguise.

    The Patient Protection and Affordable Care Act destroyed private health clinics in America. Only massive Hospitals and Insurance Companies can comply with its regulatory requirements. Any Legislative Act that increases costs and reduces competition isn't good for Consumers.

    Collapse
    1. Avatar photo
      Mudskipper

      Sounds good. On paper. Can you point me to any country that handles health care in that way and gets good results in terms of cost, percentage of population covered, and health outcomes?

      Collapse
      1. CatoTheElder

        I think it sounds good only to the ignorant and those privileged enough to have highly employer-subsidized care. It might have been a good idea back in the days of barber-surgeons and blood-letting, but in the modern world? Health care is easily the most complex entity most people ever have to deal with. If we begin from the assumption that nearly all reasonable and sane individuals want good modern medical care for themselves and their families, and that society benefits from a state of affairs in which everyone receives appropriate medical care (except perhaps for purely cosmetic procedures) without some too-large number going bankrupt or foregoing care, there is no way that government cannot be highly involved. The costs are too high, too erratically encountered, too unpredictable, and too hidden.

        Collapse
    2. Avatar photo
      Pat Riot

      So what do you do when an uninsured person shows up dying at the hospital? Just let them die?

      Collapse
  6. Avatar photo
    Jason

    Any anticipated legal challenges and how they may play out? Can your staff write about or podcast about this angle?

    Collapse
  7. Daniel Rabiner

    Yes please up until public option/expansion of Medicare to 60 year olds. Need more details once it's debated in Congress of final version.

    Collapse
    1. Avatar photo
      rlritt

      This really important. During the Recession under Bush, I knew several people in their 50's who were laid off of very good paying jobs with insurance. They could not afford any insurance at all after they were laid off. Even when they got new jobs, those jobs did not provide ins. Fortunately, the ACA was passed FINALLY! and they were able to get ins through the exchange. I kept saying people over 50 or at least 60 should be able to buy into Medicare.

      Collapse
    2. Avatar photo
      DougAz

      I'm past Medicare age - but there are thousands of people that can not buy insurance over the age of even 55 - and 60 -- many go uninsured until Medicare age 65.

      M4A - but start with lowering the age -- and taxing the untaxed economy (Capital gains, Carried Interest, latent major real estate assets,..)

      Collapse
  8. Avatar photo
    Earl King

    First of all I thank The Dispatch Staff for doing what I have suggested (asked I suppose) and that it report on what a Biden election would mean....Policies not personalities. That said I wish the author would have expounded on what the public option would mean to Doctors and Hospitals. He is correct Medicare does not cover costs...Private employer health insurance over pays which allows for Hospitals and Doctors to cover costs and do things like buying new equipment as an example. Further eroding the private health care system has consequences. Leaving older MRI's machines in place. Not investing is new equipment or procedures or even new drug therapies. In other words a diminution of our health care. Sadly I cannot get any responsible party to enact my suggestion...That must mean its a dumb one. LOL.
    When you add up the number of people is Medicare, Medicaid, CHIP, the VA and other government health care plans already half the country is covered by Govt. run Health Insurance. 99% of people when they discuss health care are really talking about health insurance....and it drives me crazy. The two are conjoined but very different. First, we need to solve the discrepancy in what private vs. public health insurance pays facilities and providers. Second, we need to solve the problem of who get public health insurance. Public Health insurance is never going to be as good as private. Never. It is rationed..and will cont. to be so. It is rationed thru availability and what it pays for and what it doesn't pay for. It rarely pays for the latest procedures for example. Back to my solution. Currently 5% of the public uses 50% of our total medical costs. My solution for the cost of health insurance is those people need to moved to public health insurance. Medicaid if you will. This would lower premiums for any public option, ACA or private health care. Secondly, we need to design health insurance for the young. The earn the least, at least in their early years...and if they are not covered by their employer...they need a plan covers emergency care..and some annual things like birth control and annual flu shots and basic ob/gyn exams and the like. I don't think any American who has a current private health care plan....is going to like our system if we move everything to a Govt. plan. Yes seniors are happy with Medicare....but that only because we have the private system paying for that plans shortfalls. Doctors are not going to borrow $350,000 to become physician and specialists only to be told they can only earn $175,000 a year. We currently have a 30,000 shortfall in Family Practice Physicians...who make a paltry $80,000 to $100,000 a year. Under Medicare and most Private plans, unless you do procedures you earn nothing. Our most needed MD;s are paid the least...Welcome to America.

    Collapse
    1. Mary Stine

      All good points, Earl! In designing health insurance plans, for the young especially, we need options for part time workers. We need a taxpayer supported program like Vista for medical workers and doctors that helps fund education for family practice physicians, nurse practioners, nurses and EMT's . These people are our gatekeepers, the system is built on them.

      Collapse
    2. Avatar photo
      rlritt

      I think that's the point. If you can afford a private plan, you can get it. If you can't afford it, there is a public option.

      Collapse
  9. Pearse

    It seems that as long as providers are being paid for service, rather than for health, the system will remain broken. Government run systems like the UK's work because they can also set what services are covered, essentially telling patients, "No, we won't pay for that. Too bad."

    Collapse
    1. Avatar photo
      rlritt

      It does that already. My son was on an Exchange ins plan when he turned 26. There were limits on what they covered. Its also foolish to say young people don't need insurance. My 24 yr old daughter broke her ankle ($1,000's) and my 21 year old son tore his ACL ($8,000) thank God they were still covered by my insurance.

      Collapse
    2. Avatar photo
      Rick Harlan

      I doubt that rationing health services would work in the US. There was a time when industries would lobby Congress with money they got from doing business to pass laws that make that business more profitable so they could lobby Congress even more, and it seemed a little sleazy. Now we have groups lobbying Congress with money they got from Congress to pass laws to give them more money to lobby Congress with, and who even gives it second glance?
      How could we ever shame Congressmen or lobbyists enough to prevent teeth whitening and pedicures from being covered in a single payer system? Get ready for Armageddon of the Commons!

      Collapse
      1. Avatar photo
        rlritt

        Teeth whitening and pedicures are not covered. My dental insurance pays $1,000/yr. I need a molar piulled. Its going to cost $2,000, and that's the cheapest. I've shopped around.

        Collapse
    3. Scroop Moth

      Too bad, or “Lucky you, you do not need that done to you”?

      Collapse
  10. El Kabong

    This is a great start of the series on a potential Biden agenda. Looking forward to more deep-dives into what the plans are or likely to be.

    Collapse
Load More