Here's how we can have 'Medicare for all' with a private option

Here's how we can have 'Medicare for all' with a private option
© Greg Nash

According to CNN 2018 exit polls 41 percent of voters named health care as their most important issue.

According to the New England Journal of Medicine, reducing health-care costs is top priority for 69 percent of Americans.

A Kaiser Family Foundation poll found that 56 percent of the public supports "Medicare for all," but 74 percent wants to keep their existing insurance. Seventy-seven percent, including 69 percent of Republicans, favor allowing everyone to choose Medicare as their health insurance. 

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When asked which health-care legislation Congress should focus on, 52 percent of Democrats and Democrat-leading independents chose improving the Affordable Care Act versus 39 percent picking Medicare for all.   

Some Democrats support pure Medicare for all while others want to retain private insurance. These seemingly opposing stances can be reconciled with a united front for health care. A united front means that progressives and moderates put aside their differences for now.

It includes: 

1) Providing immediate relief from the burden of health-care costs

2) Over time, offering an improved Medicare to all Americans

3) Allowing people to keep their private health insurance — the “private option.” Most urgent is health-care cost relief. 

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Million of Americans report medical financial hardship, according to Yabroff in the Journal of General Internal Medicine; this includes forgoing or delaying needed health care because of cost. Why are health-care costs so onerous? 

First comes the skyrocketing price of health insurance premiums. One hundred and fifty-two million Americans get their health insurance through their job. For those families, average insurance premiums increased from $6,500 in year 2000 to over $19,000 in 2018. On average  29 percent of the premium —$5,500 — is paid by the employee, not the employer. 

Second is the punishing burden of deductibles: patients pay the first portion of their health expenses each year before coverage kicks in. 

The average deductible for job-based insurance jumped from $500 in 2006 to $1,500 in 2017, sometimes exceeding $6,000.

Most people with insurance through the ACA choose Bronze or Silver plans, with average 2019 deductibles of $6,258 (Bronze) and $4,375 (Silver). 

Third, after meeting the deductible, patients still pay a substantial portion of health-care bills out of their pockets. Most employed workers pay an average of 19 percent of hospital costs, which could easily exceed $5,000 (on top of their deductible).

People with chronic illnesses like hypertension and diabetes may take six medications with a $25 copay per 30-day prescription — that’s $1800 a year. Patients skimp on pills due to cost, which increases the risk of complications, hospital admissions, and death. Commonly-used drugs for rheumatoid arthritis and multiple sclerosis have annual list prices around $60,000, of which many patients pay $16,000 annually per drug. 

A University of Pennsylvania study found that 49 percent of cancer patients with common levels of patient cost-sharing did not pick up their anti-cancer prescriptions due to the cost. Because Medicare has similar out-of-pocket costs as private insurance, any Medicare for all plan must improve Medicare to reduce the bills that Medicare patients have to pay themselves. 

How might a united front for health care work? When I turned 65, I received a red, white and blue Medicare card in the mail. I didn’t apply for it — it just came. I had private insurance through my job and I elected to keep it. I chose the private option. A few years later, I started using my Medicare. 

If the Medicare age went down from 65 to 55, we would receive a Medicare card shortly after our 55th birthday. Or Medicare might automatically cover children under 18. Over time, everyone would receive a Medicare card in the mail. We would have the private option. But we would be insured from the moment we are born until the day we die. 

The details of financing must be debated. A couple of things might be important. First, to keep taxes down, employers whose employees choose Medicare should pay into Medicare the same amount that they were paying for those employees’ private insurance. Otherwise, employers would save a lot of money at taxpayers’ expense

Second, the social security contributions employers and employees pay to support Medicare would rise, especially for higher-income people. When we are young and healthy, we pay so that when we become old and sick, we benefit. 

If Democrats win the White House and Congress, a transition to Medicare for all with the private option becomes possible. In the meantime, Democrats need to come together in a united front that can defeat Donald TrumpDonald John TrumpDavid Axelrod after Ginsburg cancer treatment: Supreme Court vacancy could 'tear this country apart' EU says it will 'respond in kind' if US slaps tariffs on France Ginsburg again leaves Supreme Court with an uncertain future MORE and relieve people’s suffering from health-care costs. 

Thomas Bodenheimer M.D. is a professor emeritus at the University of California San Francisco School of Medicine. He is also the co-author of the health-policy book "Understanding Health Policy."