The Big Economic Shift: Democratic Candidates 2020 Healthcare Report

Healthcare is another major issue in the 2020 Democratic primary election, with all of the candidates providing large proposals on a public or single-payer healthcare option, including the widely publicized Medicare for All (M4A) proposal from Senators Warren and Sanders.

An Ipsos poll in 2019 considered which issues were of greatest importance in the Democratic primary election.  It found that healthcare was the second biggest issue in determining how voters would choose their candidate, second only behind the candidate’s perceived ability to beat Donald Trump.  Healthcare was also considered to be the most important issue for Democrats in the 2018 midterm election.

Some of the issues facing individuals in the US include high out-of-pocket healthcare costs, incomplete coverage, increases in prescription drug prices, as well as somewhat inefficient and disconnected care and administration.  JAMA came out with a study in 2019 that showed “the estimated cost of waste in the US healthcare system ranged from $760 billion to $935 billion, accounting for approximately 25% of total healthcare spending, and the projected potential savings from interventions that reduce waste, excluding savings from administrative complexity, ranged from $191 billion to $282 billion, representing a potential 25% reduction in the total cost of waste. Implementation of effective measures to eliminate waste represents an opportunity [to] reduce the continued increases in US health care expenditures.”  Clearly there should be broad bipartisan support for system change: the question is not about whether these issues should be solved and is rather more a question of how these problems can be tackled.

Even though most of the top-running Democratic candidates are in favor of a single-payer system to solve this problem (such as M4A) a Kaiser Family Foundation Health Tracking Poll in 2019 found that a larger proportion of Democrats and Democrat-leaning independents preferred expansions “building on the Affordable Care Act (55%) rather than replacing the ACA with a national Medicare-for-all plan (39%).”  Support generally (across Democrats and Republicans) for a Medicare-for-All type plan hovered around 53% in November 2019.

Of the Democratic Candidates, Biden is more in favor of a plan that builds on the ACA, while Sanders is at the other end promoting pure M4A.  Buttigieg suggests Medicare-for-All-Who-Want-It, while Warren would shift towards a generous public option with the idea that M4A comes quickly and naturally afterwards.

Key Takeaways:

1. All of the candidates propose some kind of switch to a single-payer healthcare system, either in whole (mandatory) or in part (optional).
2. Reducing drug prices for consumers is a key issue for all candidates.
3. All of the candidates also consider issues of healthcare with regard to disadvantaged or special groups.  For example, all of the candidates have health policies targeted specifically at rural populations.  All of the candidates also have separate healthcare policies for women’s health, veteran’s health issues, aged care, and disability support.
4. When broken down, none of the candidates’ plans match spending with their proposed revenue sources to pay for this spending.  Given the entitlement nature of the spending set out in M4A (if you qualify, you get coverage), these costs are likely to be more expensive than they are projected.  This will be in part due to the large cohort of baby boomers retiring and going on Medicare.

Biden

Biden’s plan for healthcare is called The Biden Plan to Protect and Build on the Affordable Care Act. His approach has four parts:

1. Give every American Access to Affordable Healthcare Insurance
2. Provide the Peace of Mind of Affordable, Quality Healthcare and a Less-Complex Health Care System
3. Stand up to Abuse of Power by Prescription Drug Corporations
4. Ensure Healthcare is a Right for All, Not a Privilege for Just a Few

Under the first point, Biden notes that he will create a “plan to insure more than an estimated 97% of Americans.”  First, he will give Americans a public health insurance option, like Medicare.  This will be available whether they are insured through their employer, independently or individually insured, or if they have no formal insurance coverage.

Biden suggests that this public health option would reduce costs for patients by “negotiating lower prices from hospitals and other health care providers.”  In addition, it would cover primary care without co-payments, and would coordinate better between doctors.  Finally, he suggests that this option would help small businesses to afford coverage for their employees.

Next, he would increase the value of tax credits to “lower premiums and increase coverage” for working Americans.  This tax credit is received by families who make 100-400% of the federal poverty level, and is intended to help them to pay for health insurance on the individual marketplace.  The tax credit ensures that families do not have to pay more than a certain percentage of their income on a silver or “medium generosity” plan.  The Biden plan would lift this 400% cap and would also reduce the percentage of income from 9.86% down to 8.5%.  Furthermore, he would increase the size of the tax credit by matching it to the “gold” plan rather than silver.

Biden would also address the issue of individual states refusing “to take up the Affordable Care Act’s expansion of Medicaid eligibility,” by offering premium-free access to the public option to individuals in those states who would be otherwise eligible for Medicaid.

Under the second point of his plan, Biden would stop “surprise billing” by barring hospitals and other health care providers from charging patients “out-of-network” rates when the patient has no control over which provider they see, such as during an emergency hospitalization.

Next, Biden suggests using aggressive antitrust measures to tackle market concentration in the healthcare sector.  In addition, Biden would “partner” with healthcare workers to search for innovative solutions that improve quality of care and increase wages for low-wage healthcare workers.

Under his plans to stop the abuse of power by drug corporations, Biden would “repeal the existing law explicitly barring Medicare from negotiating lower prices with drug corporations.”  This is with the aim of lowering costs of medications for consumers.  In addition, for new specialty drugs that are introduced to the market with little or no competition, Biden would establish a review board to assess the value of these drugs, based on an average of the prices in other countries.

Biden also proposes that “all brand, biotech, and abusively priced generic drugs will be prohibited from increasing their prices more than the general inflation rate,” and that manufacturers increasing prices over this rate would be subject to fines.  He does not specify a definition for what would count as “abusively priced generic drugs.”  In addition, Biden would allow prescription drugs to be purchased from other countries, with certification from the US Department of Health and Human Services.

In addition, Biden would follow Sen. Jeanne Shaheen’s plan to end the existing tax deduction for all prescription drug advertisements.  He also supports Sen. Patrick Leahy’s proposal to accelerate the development of generic drugs, such as by making sure generic manufacturers have access to a sample to develop from.

Finally, in the fourth part of his plan, Biden supports repealing the Hyde Amendment, and notes that his proposed public option would cover contraception and a woman’s right to choose.  He would also work to codify Roe v Wade, and stop requirements such as parental notification requirements, mandatory waiting periods, and ultrasound requirements.  In addition, he would restore federal funding to Planned Parenthood, and would rescind the Mexico City Policy, a policy that “bars the U.S. federal government from supporting global health efforts in developing countries if the organizations providing that aid also offer information on abortion services.”

Biden also proposes to reduce maternal mortality rates, by following a strategy currently implemented in California, and implementing it nation-wide.  He would also double funding for community health centers and would “ensure enforcement of mental health parity laws and expand funding for mental health services.”

He proposes to pay for his healthcare plan by getting rid of the capital gains tax and dividends exclusion, and by rolling back Trump’s tax cuts for the very wealthy by increasing the top rate to 39.6%.

Biden also includes some separate plans for healthcare in rural areas, in the Biden Plan for Rural America.  First, he would “provide rural health care providers with funding and flexibility necessary to identify, test, and deploy innovative approaches to keeping their doors open and providing care for the unique needs of rural communities.”  One example of these kind of plans is the Pennsylvania Rural Health Model, which gives rural hospitals “more flexibility to decide how best to spend dollars to improve the health of the population they serve.”

He also suggests supporting a plan to help rural hospitals more easily meet the needs of their communities, by allowing a new designation called the Community Outpatient Hospital.  This is proposed in the bipartisan Save Rural Hospitals Act.  From this legislation he also supports the elimination of payment cuts and additional payments for rural hospitals.

Biden also proposes to help community health centers be better equipped, by establishing a grant program that would help these centers hire social workers or other professionals, coordinate resources better, or provide transport to patients.

In addition, Biden aims to increase the number of individuals pursuing health-related fields in rural areas, by, for example, increasing funding for “residency programs in rural areas, expanding the National Health Service Corps, and developing high school-community-college-health-center partnerships to inspire rural youth to pursue jobs in health care.”  New health clinics would also be built in rural areas and the deployment of telehealth for mental health and specialty care would be accelerated.

Biden proposes further healthcare plans in his Plan for Older Americans.  First, he proposes that under Medicaid he will ensure that those who need long-term care will be able to choose home- and community-based care if they wish to do so.  He would also provide a $5000 tax credit for informal caregivers such as family members caring for loved ones.  He will also work to enact the Caregiver Advise, Record, Enable (CARE) Act at the Federal level.

Finally, Biden also has some other healthcare plans in the Biden Plan to Fulfil Our Commitment to Military Families, Caregivers, and Survivors.  These plans are primarily aimed at protecting and supporting the mental health of those deployed in the military, or their families.

He proposes to increase funding and expand access to telehealth for military families and expand the number of free counselling sessions for families from 12-18 sessions.  He would also recruit and retain more behavioral health care professionals in military treatment facilities and redefine the “Health Professional Shortage Areas” designation to specifically include areas relating to military activity.

Finally, he would expand the National Health Services Corps to support more professional health providers to serve military populations and would expand the work of the Substance Abuse and Mental Health Services Administration to “include issues related to traumatic brain injury, substance use disorder and addiction, and other related conditions.”

Sanders

Sanders’ primary healthcare proposal is the Medicare for All Act.  The current status of Medicare is that it guarantees comprehensive health benefits for Americans over 65 years old.  Sanders is proposing that Medicare should be provided to all Americans, without insurance premiums, deductibles, or out-of-pocket expenses.  This would be a single-payer, national health insurance program.

This would also include “inpatient and outpatient hospital care; emergency services; primary and preventive services; prescription drugs; mental health and substance abuse treatment; maternity and newborn care; pediatrics; home- and community-based long-term services and supports; dental, audiology, and vision services.”

Sanders’ bill would bar employers from offering separate plans that compete with the government option.

He also proposes to lower the costs of prescription drugs by:

• Allowing Medicare to negotiate with big drug companies to lower prescription drug prices with the Medicare Drug Price Negotiation Act.
• Allowing patients, pharmacists, and wholesalers to buy low-cost prescription drugs from Canada and other industrialized countries with the Affordable and Safe Prescription Drug Importation Act.
• Cutting prescription drug prices in half, with the Prescription Drug Price Relief Act, by pegging prices to the median drug price in five major countries: Canada, the United Kingdom, France, Germany, and Japan.

Sanders also includes some plans related to healthcare in his plan for Revitalizing Rural America.  He proposes to provide and increase funding to “rebuild and expand rural health care infrastructure, including hospitals, maternity wards, mental health clinics, dental clinics, dialysis centers, home care services, ambulance services, and emergency departments in rural areas.”

Funding for the National Health Service Corps would also be increased.

In addition, he also proposes to expand access to addiction recovery services in rural areas, to lower the cost of prescription drugs in rural areas, and to promote local foods from local farmers to encourage good nutrition.

With regard to women’s health in particular, Sanders would fully fund Planned Parenthood and repeal the Hyde Amendment.  He would also oppose efforts to overturn Roe v Wade and would expand the WIC program to cover all pregnant mothers, infants, and children.

For people with disabilities, Sanders’ Medicare for All program would include home-based and community-based care.

Finally, for veterans Sanders also includes healthcare proposals.  He would work to fill the 50,000 vacancies at the VA, hiring more doctors, nurses, and medical professionals.  He would also guarantee comprehensive dental care as a health benefit for all former service members.  In addition, he would greatly expand the mental health and suicide prevention services at the VA.

For long-term services for veterans, Sanders would expand the Veteran Directed Care program, and would simplify and broaden the eligibility requirements for access.  He would also expand the VA’s Caregiver Program and would “end the VA’s blanket exclusion on medically necessary gender-affirmation surgeries.”  He would also fund $62 billion for VA hospital infrastructure and equipment.

Warren

Warren has a number of different plans that cover healthcare issues, but her primary plan is her Plan For Reducing Health Care Costs in America and Transitioning to Medicare for All.  She believes that “Medicare for All is the best way to cover every person in America at the lowest possible cost.”

Warren notes that all of the plans for Medicare for All involve a significant transition period, and she sets out three goals that she plans to accomplish in the first 100 days of being in office:

1. Pursue comprehensive anti-corruption reforms
2. Start improving coverage and lowering costs
3. Pass fast-track budget reconciliation legislation to create a true Medicare for All

She also notes that she would dedicate “$100 billion in guaranteed, mandatory spending for new NIH research.”

Under her first point, of pursuing anti-corruption reforms, Warren suggests that she would “close the revolving door” between health care lobbyists and the government and end the relationship between large pharmaceutical companies and government expertise, relationships, and influence.  She links this with her plan to End Washington Corruption.  She also proposes to tax “excessive lobbying,” which would apply to companies that spend more than $500,000 on lobbying.  All lobbyists, including health insurance and pharma lobbyists, would be banned from contributing to political campaigns.  She would also ban “all election-related spending from big corporations with a significant portion of ownership from foreign entities.”

Instead of these routes, she proposes to “institute a public financing program that matches every dollar from small donations with six more dollars so that congressional candidates are answering to the people who need health care and affordable prescription drugs.”

On her second point, to implement executive actions to reduce costs and expand public healthcare coverage, she also proposes a number of steps that she would take within her first 100 days in office.  First, she will take “immediate advantage of existing legal authorities to lower the cost of several specific drugs” with the aim of lowering medication prices for millions of Americans.  She notes two specific actions that the government can take to control drug pricing: bypassing patents using compulsory licensing authority and require the “re-licensing of certain patents developed with government involvement when the contractor was not alleviating health or safety needs.”  She also suggests that the government could play a role in further reducing drug prices by manufacturing generics and stopping price-gouging with antitrust measures.

She also notes a number of particular medications that her measures would apply to, such as Epi-pens and Insulin.  Finally, she would also direct the government to check whether any other essential medications (other than the ones she noted) could have their prices reduced using the methods she proposed.

Warren then suggests expanding ACA enrolment and expanding premium tax credits.  She would also roll back the Trump administration’s rules that would “deny Title X and USAID funding to health care providers who provide abortion care.”

The steps she proposes to take to strengthen the ACA include making sure “that a family’s access to tax credits is based on the affordability of coverage for the whole family – not just one individual.”  This would stop a coverage change for one person in the family stopping the entire family from being covered.

She would also expand ACA coverage to all legally present residents in the USA, including those eligible for DACA.  Finally, she would require employers to pass on the full value of any rebates that they receive from health insurance companies, to employees.

Warren also notes several different ways in which she would strengthen Medicare.  First, she would expand it to include dental benefits, and would stop Medicare Advantage plans (which she believes over-inflate the sicknesses of their beneficiaries, to gain higher payments to the plan providers).  She also has plans to strengthen Medicaid.  Currently, section 1115 demonstration waivers are used to allow people to be covered by Medicaid, even if they aren’t eligible.  However, these waivers can only be used in certain circumstances.  Warren would remove administrative restrictions on these waivers in preparation for Medicare for All becoming rolled-out nationally.

She also suggested increasing antitrust measures to reduce hospital and health system consolidation.

In addition, Warren proposes to create “a commission of workers (including health care workers), union representatives, and union benefit managers [to] consult at every stage of the transition process” for Medicare for All.  The commission would provide advice on things such as workforce readiness and access to care across providers, determining national standards of coverage and benefits, ensuring a living wage, and ensuring a collective bargaining process is available for workers.

The final part of her plan is actually expanding and changing legislation to enact Medicare for All.  She states that within her first 100 days she would pass her own fast-track budget reconciliation legislation to enact a substantial portion of her Medicare for All plan.

She notes that the key features of her Medicare for All plan would be:

• Broader benefits, including “comprehensive coverage for primary and preventive services, pediatric care, emergency services and transportation, vision, dental, audio, long-term care, mental health and substance use, and physical therapy.”
• Providing free coverage immediately to all children under 18, and anyone making at or below 200% of the federal poverty line.
• Free, identical coverage for Medicaid beneficiaries, so that those on Medicaid can be shifted to Medicare for All immediately with no loss in benefits.
• Transition towards free coverage for everyone.  First, those under 18 and those making at or below 200% of the federal poverty line, would have no premiums.  Others would have premiums set as a percentage of their income, to a maximum of 5%.  From year one, the plan would have no deductible, and would also include caps on out-of-pocket costs.  Premiums and cost-sharing measures would decrease to zero for everyone over subsequent years.
• Reducing drug prices (as already covered above).
• Automatic enrolment.
• Employees can choose between the coverage their employer provides, or Medicare for All.  Unions can also bargain for Medicare for All to be the default for all employees covered by their union.
• Cost control measures and provider reimbursement measures.

Warren also suggests improving Medicare specifically for people over 50.  Additional benefits would be provided, including audio, vision, full dental coverage, and long-term care benefits.  Out-of-pocket costs would also be capped.  Other features (such as drug price reductions, and automatic enrolment) would also apply as above.

She would also change several provisions in the Affordable Care Act.  First, she would expand the upper limit on eligibility for premium tax credits, to those over 400% of the Federal poverty level.  Warren would also allow any person to opt in to ACA coverage, regardless of whether they already have employer coverage or not.  The current cap of 9.86% of income being paid before subsidies are applied, would be removed.  Like Biden’s proposals, tax credits would be benchmarked to gold plans rather than silver.

Another provision she would change is that if an employee’s income goes up, their payments would still be based on the previous year’s income, so that they don’t owe any back payments.  The new payment would begin in the following year.  Finally, she would allow states to “receive passthrough funding to expand or improve coverage via the ACA’s Section 1332 waivers … [to] allow interested states to start experimenting immediately with consolidating public payers.”

Other than her Medicare proposals, she finally suggests some other healthcare reforms and programs that she would fund.  First, Warren would “boost medical research by investing an additional $100 billion in guaranteed, mandatory spending in the NIH over ten years, split between basic science and the creation of a new National Institute for Drug Development.”  She would also enact the CARE Act to fight the opioid crisis, “create single standardized forms for things like prior authorizations and appeals processes to be used by all insurers,” create a “centralized repository of de-identified claims data,” and end surprise billing.  She also would provide additional funding to prevent provider shortages, and fund an increase in clinicians, their apprenticeships, and training.

Finally, she states that “No later than my third year in office … I will fight to pass legislation to complete the transition to the Medicare for All system … integrating everyone into a unified system with zero premiums, copays, and deductibles.”  She notes that the plan provided by Senator Sanders “allows for supplemental private insurance to cover services that are not duplicative of the coverage in Medicare for All; for unions that seek specialized wraparound coverage and individuals with specialized needs, a private market could still exist.”

She notes that her Medicare for All program would be paid for with “$20.5 trillion in new revenue, including an Employer Medicare Contribution.”  She has a separate plan for Paying for Medicare.  This plan includes numerous proposals for covering the cost of Medicare for All.

Her plan for paying for Medicare for All is from advice from the IMF and various other economists. The advice splits up the potential funding into six categories:

1. Employer Medicare Contribution (8.8 trillion)
2. Additional Take-Home Pay Subject to Existing Taxes (1.4 trillion)
3. Taxes on the Financial Sector, Large Corporations, and the Top 1% of Individuals (6.8 trillion)
4. Better Enforcement of Existing Tax Laws (2.3 trillion)
5. Immigration Reform (0.4 trillion)
6. Elimination of the Overseas Contingency Operations Fund (0.8 trillion)

Finally, Warren includes a number of smaller plans for tackling health issues in particular sectors.  For example, with regard to reducing the maternal mortality rate of black women in particular, Warren proposes to set one price for an entire “episode” of care.  Warren notes that these kinds of bundled payments “give health systems both greater incentives and greater control to improve results.”

She also notes that with regard to women’s health in general, she would “create federal, statutory rights that parallel the constitutional right in Roe v. Wade,” and would “pass federal laws to preempt state efforts that functionally limit access to reproductive health care.”  In addition, she would guarantee reproductive health coverage as part of all health coverage.

With regard to veterans, she suggests improving access to healthcare for mental health issues in particular.  She proposes “significant expansions of Community Health Centers and the National Health Service Corps, which would help increase the supply of primary care and mental health providers in underserved areas,” and also suggests that service members should receive regular mental health checkups alongside their physical checkups.

In addition, for rural areas her plan focuses on access to healthcare in rural communities.  She notes that the primary issues are barriers to coverage, a loss in healthcare facilities such as hospitals and clinics, and a shortage of health professionals.  To alleviate this, first she would “create a new designation that reimburses rural hospitals at a higher rate, relieves distance requirements, and offers flexibility of services by assessing the needs of their communities.”

She would also include antitrust measures to prevent hospitals from merging in ways that are harmful to rural populations.  For example, she would “direct the FTC to block all future mergers between hospitals unless the merging companies can show that the newly-merged entity will maintain or improve access to care,” and would strengthen FTC oversight over healthcare organizations in general.  She would also increase funding for Community Health Centers by 15% per year over the next 5 years and would establish a $25 billion to support options for improving access to healthcare in rural areas.

Buttigieg

The plan proposed by Buttigieg takes on a slightly different approach, titled Medicare for All Who Want It.  This is essentially an “opt-in” public healthcare option, that would be available to anyone whether they are uninsured, covered by an employer plan, are on Medicaid, or have purchased their own insurance on the private market.

He notes that his plan would cost around 1.5 trillion over 10 years, and would be paid for with a combination of rolling back the Trump administration’s Tax Cuts and Jobs Act tax cuts, as well as “cost savings that result from empowering the federal government to negotiate drug prices with pharmaceutical companies.”  Buttigieg suggests that his plan would “incentivize private insurers to compete on price and bring down costs.”  He also notes that if private insurers could not offer something better than the public plan, this would essentially provide a “glide path” to Medicare for All.

Individuals that are in states that have not expanded Medicaid would be automatically enrolled in Buttigieg’s Medicare plan.  Anyone eligible for free coverage in Medicaid or his public option would also be automatically enrolled.  He also suggests that “middle-income individuals and families who were uninsured because they could not afford coverage will be eligible for subsidized coverage through the marketplace for either private insurance or the public option.”

Buttigieg also suggests a number of proposals for making marketplace coverage more affordable.  First, he would tighten restrictions on association health plans and short-term limited duration plans.  In addition, he would “restore and expand cost-sharing reduction payments to health plans to lower deductibles and other out-of-pocket costs.”

Like other candidates, he would link subsidies to gold-level plans, and would cap premium payments at 8.5% of income.  This is identical to Biden’s proposal already discussed above.  Like Biden, Buttigieg also proposes to end surprise billing from patients receiving care at an in-network hospital from an out-of-network doctor.  Under Buttigieg’s plan, bills would be based on whether or not a hospital is in-network, and whether or not the staff are out-of-network would not be relevant to the end bill. Instead, hospitals would bear the cost of using out-of-network providers.  In general, out-of-network providers would also have their costs capped, particularly ambulances and air ambulances.

Buttigieg also specifically mentions seniors in his plan, and notes that he would “improve affordability in Medicare by capping out-of-pocket costs, with lower caps for low-income seniors” and also aims to improve costs for seniors by working on lowering drug pricing.

For elderly populations he also covers healthcare in his plan for Dignity and Security in Retirement.  Specifically, he states that he would establish a “historic long-term services and supports program to help cover the costs of long-term care for older Americans with a high level of need,” which would provide a $90 per day benefit to those eligible, for the purpose of long-term care.  He would also strengthen the private long-term care insurance market by standardizing plans and establishing a “long-term care insurance marketplace.”  He would also allow people to elect for their long-term care to be provided at home or in their community.

In addition, Buttigieg suggests lowering costs by ensuring that health providers charge lower amounts in general.  For hospitals, he suggests that he would “strengthen community benefit requirements

[by]

defining standards for what spending counts as meaningfully benefiting the community and setting a baseline expectation for the types of community benefits in which non-profit hospitals should be investing.”  He would also prohibit health care providers from charging more than twice what Medicare would pay for the same service from out-of-network care.

For mental health services, Buttigieg proposes to enforce what he calls “mental health parity”.  This means that “coverage and treatment for mental health and substance use disorder are provided on equal terms as treatment for physical conditions.”  Health insurance plans that do not enforce parity in their offerings would be penalized.  Medicare and Medicaid would also be required to enforce this concept of parity, and he would remove the 190-day lifetime limit on inpatient psychiatric admissions.

Buttigieg also proposes to increase transparency in general for the pricing and quality of healthcare services.  He suggests that he would implement this in several different ways:

1. Pushing insurers to improve price transparency tools.
2. Encouraging price information in electronic health records so patients can discuss follow-up care options and prices with their doctor.
3. Improving provider directories, drug formulary comparisons, and plan quality ratings.

He also suggests bringing down the cost of healthcare by tackling high administration costs.  His administration reforms include:

• Harmonizing standards for transactions, including for eligibility and benefit verification, prior authorization, claims attachment, and claim status inquiry, and holding insurance companies accountable for adopting them.
• Simplifying billing by creating a central clearinghouse for claims.
• Establishing an All-Payer Claims Database that supports health care quality initiatives.
• Requiring integration of electronic health records, billing, and reporting systems, so patients no longer have to chase down their own health information.

Buttigieg would also increase funding for Federal antitrust authorities with the aim of reviewing more mergers in the healthcare sector and bringing more cases against anti-competitive activity.

He also has a number of smaller, separate plans that cover particular areas of health policy.  First, he has a Plan to Improve Mental Health Care and Combat Addiction.  This plan sets out his plans to enforce mental health parity in Medicare and Medicaid, as well as several other proposals.  For example, he would require plans to provide free annual mental health check-ups and would increase reimbursement rates for mental health and addiction care.  He would also improve training and education for clinicians on mental health issues and also increase the number of residencies and healthcare roles that are focused on mental health.

Buttigieg also sets out plans to tackle addiction issues, such as opioid addiction.  A lot of his plans focus around the “integration, co-location, and deployment of mental health and addiction clinicians in primary care settings,” to normalize mental health and addiction care and to make it easier to access treatment.  For the communities most affected by addiction and mental health issues, Buttigieg suggests $10 billion annual Healing and Belonging grants for additional support.

Buttigieg also includes a separate plan for reducing drug prices. He plans to:

• Cut out-of-pocket drug spending for seniors on Medicare by at least 50% … including an out-of-pocket cap on prescription drug costs of $200 per month.
• Cap out-of-pocket spending on prescription drugs under $250 per month for everyone choosing public coverage.
• Make co-payments for generic drugs $0 for people with low incomes insured by the public plan, Medicare, and Medicaid.

He would also increase the Branded Prescription Drug Fee on drug manufacturers and importers.  He would also “implement pricing protections against outrageous drug price inflation in Medicare and the public plan” alongside supporting and increasing Federal investment in the development of new medications.  Pharmaceutical companies that have agreements to sell prescription drugs to his public plan, would be required to disclose information to the federal government on their balance sheets, including sales and speed pricing.

His plan for Securing a Healthy Future for Rural America also sets out a number of policies particular to rural communities, though many of the plans stated are already covered in his other plans.  The new proposals raised in his rural plan include expanding “the Public Service Loan Forgiveness Program … to include employment in rural private hospitals and practice groups” and encouraging doctors to work in rural communities.  He would also increase Medicare reimbursement rates for providers working in medically underserved areas.  Buttigieg also notes that he would support women’s health in rural areas by supporting the Rural MOMS Act, as well as other legislation related to reproductive health.  Finally, he would expand telehealth services and establish a new Rural Emergency Center designation for rural health facilities to ensure greater access to critical health services.

In Buttigieg’s plan for Building Power for women, he also covers a number of women’s health issues.  Namely, the public option that he proposes would “cover preventive and comprehensive reproductive care for women, including abortion.”  He would also abolish the Hyde amendment, and would prohibit Federal “interference in public and private insurance coverage of abortion.”  His plan would also “guarantee contraception coverage and cover all family planning methods at no cost sharing.”  With regard to maternal mortality, he suggests that he would ensure coverage to improve pre-pregnancy and postpartum health but does not specify exact plans for this.

Finally, he sets out a plan for what he calls “health equity”.  This includes plans to ensure that those in disadvantaged groups (such as “people of color, people who are incarcerated, LGBTQ+, disabled, veterans, older, or living in rural communities”) would receive the same standard of care as others who are not disadvantaged.  He would establish a National Health Equity Strategy Task Force and appoint a Secretary of Health and Human Services to pursue this goal.

He would also designate particularly disadvantaged communities as Health Equity Zones.  These zones would receive Federal funding to reduce disparities, with funding of $10 billion over 5 years.  A Public Health Infrastructure Fund would also be set up to better support State and local health departments.  In general, ideas of health equity would be supported at the Federal level and included in all public, Medicare, and Medicaid plans, what he calls a “Health in all Policies” approach.

Summary

Healthcare is the most complex policy issue for the United States and the Democratic candidates.  This stems from the entitlement structure to US spending (VA aside) and the public demand for subsidized healthcare services.  The more the government subsidizes, the higher the demand increases.  There are a number of different proposals that have been put forward by the Democratic candidates to solve this policy issue, but many of their policies overlap in some crucial ways.  Generally, the candidates all desire a shift towards a public option for healthcare, with goals such as complete access to health insurance, greater healthcare coverage, lower costs, and greater support for disadvantaged or special populations.

Biden and Buttigieg provide the most moderate (compared to Sanders and Warren) of the public options, with opt-in ability and building on the current ACA.  On the other hand, Sanders and Warren are in favor of a M4A option that would essentially replace the private insurance industry altogether, though Sanders would create a much more rapid shift in the healthcare industry than Warren.

The Brookings Institute notes that that current efforts under the Trump administration to repeal ACA coverage programs and de-regulate the health insurance industry would likely increase the number of Americans who are uninsured, though this would decrease the costs of health insurance subsidies by the Federal government.  On the flipside, the Democrats’ plans would ensure that nobody goes uninsured, but would substantially increase costs to the Federal government due to this.  The transition to a single-payer system would likely increase efficiency and provide possible cost reductions within the healthcare system, but would include a bumpy transition with disruption in the healthcare markets and complication as coverage is changed for the entire population.  It would likely cause tremendous re-evaluation of all the healthcare insurance companies with subsequent equity price declines as the goal is to replace healthcare insurance with a single payer: the US government. 

Sanders’ M4A plan is somewhat analogous to plans that exist in other countries, such as Canada, New Zealand, and the UK NHS.  However, Sanders’ plan is significantly more expensive, including vision and dental services, prescription drugs, rehabilitative services, and home health services.  One key factor to keep in mind is that Canada, New Zealand, and the UK NHS have budgets, while Sanders’ plan is an entitlement program.  This means the Sanders plan will not have a spending cap or budget cap.

In addition, Sanders’ plan does not charge any out-of-pocket costs.  In most other countries that use these kind of single-payer healthcare plans, there are still some small out-of-pocket costs for consumers, such as paying for dental care, a nominal fee for medications, and some payments for hospital stays or surgeries.  Given that Sanders’ plan covers all of these costs, it has a high potential to expand the amount of healthcare available to the American population but would also significantly increase the costs of this system to the government.

When asked how much his plan would cost, Sanders has stated his plan would cost between “$20-$30 trillion” with both the Mercatus Center and the Urban Institute estimating $32 trillion over a 10-year period.  The Mercatus Center points out that, “not even doubling all federal individual and corporate income taxes would full fund the proposal.”  In addition, Neera Tanden, the president of the Center for American Progress, notes that even in countries with public healthcare systems, most of them “do not wrest the entire burden of every single person’s health care into the federal government.”

Sanders proposes that his plan would reduce American health care spending by being able to aggregate healthcare costs and reducing time and money spent negotiating with different insurance providers and so on.  However, due to the expansive coverage in his proposals, it’s likely that additional doctors’ visits and hospital trips could cancel out these cost reductions.

The Brookings Institute also notes that plans such as those suggested by Biden and Buttigieg, with a public option, would likely result in lower premiums for the public plan, and “might also enable private insurers to negotiate better rates with providers, reducing premiums for private plans as well.”  However, the concern with a public option is that when it is not over-arching (as in single payer) it may not be able to provide the same efficiencies in utilization and care-management that a single-payer option would provide.  If the public option is seen as good by the public and becomes popular, it will evolve into a type of M4A eventually.  The likely cost increase of this will then be outside the 10-year window that the Congressional Budget Office uses to calculate the cost, making it difficult to estimate and predict.

None of this is to say that a single-payer healthcare system wouldn’t potentially create better health and healthcare system outcomes: the issue is that the cost of implementing this is huge, and with Sanders’ proposal the cost is at the highest point of what this kind of system can cost.  While there are positive and negatives of all the options proposed by the Democratic candidates, a political and cost issue remains.  Tanden also notes that there are “big questions about the United States moving from the most conservative health-care system to the most leftward government-run health-care system,” and this shift may simply not be possible in the current climate, or so rapidly.

With respect to issues such as drug pricing that are covered by the candidates, the big issue is providing better prices for consumers, versus incentivizing innovation for pharmaceutical companies.  Part of the issue is that the government is currently prohibited from negotiating drug prices for Medicare, and many candidates want to allow Medicare (HHS) the ability to negotiate to reduce drug prices.  This applies particularly to very-highly priced drugs, which in some cases can be so expensive that consumers cannot pay for their necessary medications, such as insulin.  There is currently strong bipartisan support for medication affordability, as well as the proposal that the federal government should be able to negotiate with drug companies directly.  This proposal is one that is likely to have large benefits for consumers, and should still allow companies to price their medications at a level that promotes innovation and corporate returns.

The CBO did a study on a preliminary estimate of the effects of direct prescription drug bargaining by HHS on federal direct spending and revenues related to Part D of Medicare, the outpatient drug benefit for 125 drugs.  They found that it would reduce federal direct spending for Medicare by $345 billion over the 2023-2029 budget window.  “The largest savings would come from lower prices for existing drugs that are sold internationally, for which the price ceiling would be binding in most but not all cases, CBO estimates.”  Clearly, there are large savings to be had from this strategy. 

However, one must also consider the risk that pharmaceutical companies will simply stop producing certain drugs that become unprofitable.  This would not only reduce the supply of these drugs to consumers, but also risks raising the cost of acquiring the drugs from outside the United States due to shortages.  As well, it could also create disincentives to engage in research for new drugs due to the reduced potential profitability. 

The issue of healthcare is incredibly large and complex, as many commentators on both sides of the political divide note large issues with the way that the current system operates in the United States. The Democrats’ proposals do support disadvantaged groups and have lofty aims for reducing costs and increasing efficiencies in the system, but they come with a hefty price tag: one that may not be politically palatable even to other Democrats.  As a reminder, all of the plans will need to be part of legislation created by Congress and not a simple executive order by a president.  This makes it even less likely to occur.  In addition, it was also not possible during the Obama administration when both houses of Congress had Democratic majorities, to pass a single-payer plan of the Affordable Care Act.