Medicare for All

Beto O'Rourke's Health Care Plan Is an Attempt to Back Medicare for All Without the Problems of Single Payer

Medicare for America doesn't solve the problems of government-run health care. It just creates new ones.


Allison Dinner/ZUMA Press/Newscom

If you want to understand the current state of the Democratic party's internal debate on health care, it's worth looking at how Sen. Elizabeth Warren (D-Mass.) responded to a question about the issue at a CNN Townhall earlier this week. Warren is a supporter of Medicare for All, the single-payer plan put forth by her rival for the Democratic presidential nomination, Sen. Bernie Sanders (I-Vt.), so you might have expected her to respond by pointing to her support for the plan.

But the question was about the problems that single-payer would cause for labor unions, and Warren, faced with a criticism from the left, didn't jump to a defense of the idea. Instead, she outlined a number of possibilities for expanding Medicare—letting more people buy in, or altering the age range so that it covers people younger than 65, and so on. She closed by saying she would get all the stakeholders together to discuss options.

Warren has a very specific, very detailed plan for everything, right down to which iPhone charging cables you should be able to buy. Her campaign so far has been structured as a series of policy briefings designed to demonstrate her command of policy details, as if she is running for White House legislative director rather than president.

But for once, she didn't have a plan—just options and possibilities. She appears to have discovered that being very specific about health care plans makes those plans much easier to criticize. For a presidential candidate, a potential and vague health care plan can be more valuable than a full-fledged proposal. Which is why her answer was effectively a punt: I don't have a plan—but elect me president and I'll figure one out.

Warren's uncertainty mirrors the larger debate that is going on in the Democratic party right now. On the one side are the die-hard single-payeristas, who believe that a full-fledged single-payer plan that outlaws today's private health insurance market is the only way to go. That includes people like Rep. Pramila Jayapal (D-Wash.), who recently introduced a single-payer plan that would get rid of private coverage in just two years—even faster than the four-year transition called for in the Sanders plan.

On the other side are people like Democratic Speaker of the House Nancy Pelosi, who believe that folks like Jayapal are crazy, which is another way of saying "people who can read the polls." (When one side of your party thinks Bernie Sanders isn't radical enough, it has the effect of making ordinary big-government liberals like Pelosi look like sensible moderates.) For the most part, this faction wants to tinker with Obamacare and avoid grand health policy schemes.

The challenge for the 2020 Democratic primary contenders, then, is to situate themselves somewhere in the middle—embracing Sanders-style Medicare for All in theory while avoiding its pitfalls in practice. Warren's carefully non-committal list of options was effectively a way of suggesting support for all the popular parts of Medicare for All without wedding herself to any of its less popular aspects.

That's roughly what former Texas Rep. Beto O'Rourke is doing with his embrace this week of Medicare for America, a health care plan that would substantially expand Medicare without immediately eliminating all private insurance. Under the plan, newborns, the uninsured, Medicaid enrollees, and people covered through Obamacare's exchanges would be automatically enrolled in a revised Medicare program. Employers could continue to offer private health coverage, but only if it met federal benefits requirements, which would include covering 80 percent of expenses on average, or employers could move workers into the government plan and pay into the system. Individuals who work for companies that offer coverage could also opt into Medicare on their own.

In theory, this solves the biggest (though far from the only) political problem with single-payer: mass elimination of private coverage. As O'Rourke told the Texas Tribune, "It responds to the fact that so many Americans have said, 'I like my employer-based insurance. I want to keep it. I like the network I'm in. I like the doctor that I see.' " This is the middle ground, as O'Rourke sees it.

In practice, there would still be disruption, albeit on a smaller scale: The individual market, which includes plans purchased on Obamacare's exchanges, would effectively cease to exist, forcing millions off their current coverage. Some employers who currently offer coverage would probably push workers onto Medicare immediately, and over time more might follow.

And while the plan would technically preserve some role for employer based private coverage, it would effectively put the federal government in charge of that insurance. Under Medicare for America, your choice would be to get coverage through the federal government, or get employer coverage that has been…approved by the federal government. Some choice.

O'Rourke's embrace of Medicare for America is also an attempt to avoid another big hurdle for single-payer: the massive increase in government spending it would require. Multiple estimates put the federal price tag for Sanders' plan at around $32 trillion over a decade, but there's no clearly defined plan for financing the increase in government spending.

Medicare for America, in contrast, pares back tax reductions passed by Republicans in 2017, taxes households earning more than $500,000 annually, boosts payroll taxes, and imposes new excise taxes on tobacco, alcohol, and sugar-heavy drinks. It also requires participants to pay premiums and out of pocket costs up to $3,500 for individuals or $5,000 for families. Given how much of the appeal of Sanders-style single payer is that it would eliminate premiums and out of pocket spending, and how negatively the public reacts to raising taxes to pay for government-run health care, these seem like potentially significant political problems that would have to be overcome.

Medicare for America doesn't solve the problems of Medicare for All so much as shift them around, creating new ones of its own. It tackles the expense of health care by foisting it on individuals and corporations through fees, premiums, and taxes. It leaves some private employer coverage in place, but turns it into a de facto public utility. It doesn't disrupt everyone's coverage, but its disruptive effects would still impact millions of people. It's just a different set of trade-offs.

What the current crop of Democratic presidential hopefuls all seem to want is a plan that is all benefits and no downsides—comprehensive coverage for everyone, with no costs imposed on anyone (except perhaps a very small cohort of very wealthy people, who, for the purposes of these campaigns, don't really matter). That plan doesn't exist, which may be why Warren, who is typically an effective tactician when it comes to balancing policy with politics, is offering only options and ideas, maybes and coulds and possiblies. She says she'll sit down with all the relevant stakeholders and come up with a plan that satisfies everyone, but she doesn't know what that plan is yet. That's probably because there isn't one.