Tennessee has a large number of uninsured people due to the state refusing to expand Medicaid, paid for 90% by the federal government. Medicaid expansion is needed, but there is another way to expand coverage — the "public option."
President Biden is advocating for Medicare to be able to enroll people under 65, but on a strictly voluntary basis. This is known as the "public option." Former President Barack Obama had included this concept in his original Affordable Care Act, but it was pulled out after health care special interest groups pressured moderate Democrats.
A major U.S. hospital magazine, Modern Healthcare, recently posited that under an effective public option health care program, providers (hospitals, physicians, etc.) may make less money under Medicare versus private pay. I agreed with that premise, but the issue is more important and complex than just provider reimbursement. The voluntary public option could be a positive first step toward Medicare for All, as described below.
In Canada, for example, one of the most popular governmental programs is single-payer health care. It is also known as Medicare.
Back in 1970, Canada and America both spent 6% of gross domestic product on health care. However, in 2019, Canada, with a single-payer system, only spent 11% of its GDP on health care versus 17% here.
In Canada, where all people are covered by Medicare, per capita costs are also much lower —$5,418 per capita — than they are in the USA at $11,071 per person. Meanwhile, we currently have 29 million non-elderly people with no insurance at all, and many more who are underinsured. Canada has none.
Full expansion of Medicare, along with accompanying budgeting and rate setting, is the only long-term solution to both our access problems and our ongoing health care cost containment crisis. But that's not to say it will be easy.
Why? Because, politically, Medicare for All is a poor short-term item to push versus a public option, which still preserves private insurance and will not alienate those on corporate plans.
The biggest technical obstacle is that voluntary Medicare enrollment will mean that the sicker people will enroll — the folks who need more expensive care. This "cherry picking" will cause Medicare premiums to rise for all enrollees longer term. This rise in expenses could force the U.S. into finally doing what it should have done in the 1960s: provide Medicare for all of its citizens to contain costs.
Why will going to Medicare contain systemic costs? Because Medicare has an overhead of 2% versus 12% for private insurance companies, insurance can be run more efficiently.
Cost containment should bring around moderates and maybe even a few conservatives to the real solution — Medicare for All.
However, we should note that before Obama ran for office, he was openly in favor of single payer, as was Trump at one time. Obama later indicated that he changed his position to promote the Affordable Care Act, which expands the role of private insurance because we have to work with the system that is currently in place. That is D.C. code for he could not handle the politics — the influential insurance/pharma/provider lobby that opposes real reforms.
And that's why Biden is going push the public option, as opposed to single-payer, short-term, which is better morally and technically.
We should all hope, however, that the next president will advocate for a single-payer system, with substantial bipartisan support. Of course, that will not happen unless voters pressure legislators into doing what's right versus what the special interests want.
Jack Bernard is the former director of health planning for the state of Georgia and a retired senior vice president with a national health care firm.