Debates 2020

Delaney on Medicare for All: 'This Isn't About Health Care, This Is an Anti-Private Sector Strategy'

The former Maryland congressman criticized the progressive wing of the Democratic Party for embracing such expansive government involvement.

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Former Maryland Congressman John Delaney argued during Tuesday night's Democratic primary debate in Detroit that his opponents' support for Medicare for All "isn't about health care, this is an anti-private sector strategy."

Insofar as some of his opponents support eradicating private health insurance, he's not wrong. Sen. Bernie Sanders (D–Vt.), who has defended eliminating private health insurance in the past, did not push back on CNN moderator Jake Tapper's statement that Medicare for All would "take private health insurance away from over 150 million Americans." Instead, Sanders used the fact that the health care industry makes "tens of billions in profit" as evidence that the current system is dysfunctional, even though corporate profits are relatively small in the context of the entire U.S. health care system. Sen. Elizabeth Warren (D–Mass.), who also supports eliminating private insurance, described the business model of private health insurance companies as "taking as much money as you can in premiums and pay out as little as possible in health care coverage."

In response, Delaney criticized Medicare for All. While the former congressman didn't focus on the roughly $32 trillion cost of the program, he did argue that it would restrict choice. He told the Detroit debate audience that he didn't want the Democratic Party to "be the party of subtraction, and telling half the country, who has private health insurance, that their health insurance is illegal." 

Instead, Delaney favors universal catastrophic coverage, which means the government would provide a certain type of insurance to everyone under the age of 65. This insurance would cover major, unexpected medical ailments. For other procedures, people can use supplemental private insurance, pay out of pocket, or if they are below a certain income threshold, qualify for additional government assistance. This form of health insurance is the model Singapore uses, a country with the lowest government health care spending per capita in the developed world. Under this system, workers could opt out and remain on their more comprehensive employer-sponsored insurance, although Delaney has proposed eliminating the tax exclusion for employer health plans.

Delaney's plan would rein in some perceived excesses of the current private health insurance system by moving away from health insurance as the main way to pay for health care and instead make it a way to manage the risk of high-cost medical ailments. That said, the option of private insurance would still be there for patients. 

The critical rhetoric from Sanders and Warren about profit in the health care system suggests they are not interested just in achieving universal health care, because, as Delaney demonstrated Tuesday, there are other ways to achieve it. 

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  1. How the heck did he qualify as a Democrat? Did he slip the doorkeeper something?

    1. He’s a Democrat because he’s not for Trump. Simple as that. Never forget, if Trump was for Medicare-For-All, then Delaney would be against it. Traitor.

    2. He’s a time traveler.

      1. The moderates that represent successful, hard working or risk taking Democrats are starting to fight back against the far left. A rant on Morning Joe, all about illegal immigration welfare. Its about time.

  2. How did a moment of sanity sneak into the debate?

  3. “taking as much money as you can in premiums and pay out as little as possible in health care coverage.”

    It’s pretty obvious the Democrats need to adopt the principals of awarding sainthood so they can install the business leaders they feel are worthy.

  4. News analysis of healthcare politics has been abysmal. In the debate format, it has mostly been a matter of lobbing the other party’s talking points at candidates, to see if you can flummox them by forcing a one-minute answer to a question stripped of context.

    It is a fair question, however, to ask why anyone would suggest it makes sense to deny an option to buy private coverage, and instead force participation in a government program. One answer that never gets mentioned is underwriting—a term you can look up in a dictionary, without ever getting any inkling what it means for today’s healthcare policy debate.

    What underwriting means in context is insurance companies managing risk, and boosting profits, by excluding coverage for sick people. One convenient and popular way to do that has been to tie health insurance coverage to employment. The demands of regular employment, of course, screen out a large percentage of the costly-to-insure elderly, sick, and disabled. That opens the way to offer cheaper-looking coverage to the healthy remnant, while deceptively claiming the apparent bargain has been delivered by the free market.

    Beneficiaries of these better-looking deals never have to confront the question of how they came to be so lucky. They just take it as their due. Any suggestion that they be deprived of that good fortune strikes them as outrageous.

    That has unfortunate implications for the public part of any would-be public/private scheme to manage national health insurance. Implication one is that the public plan will be stripped of contributions well people would otherwise pay toward treatment of the sick. Implication number two is that sick people would be forced disproportionately into the public plan, vastly increasing its costs.

    That double whammy—the unavoidable result of private insurance company underwriting—is guaranteed (in any public/private scheme) to make the public plan look extremely costly and in need of subsidy, while making private insurance plans look by comparison better-managed and profitable. One politically-driven takeaway in any such regime would be unceasing pressure to cut back the public part of the plan, until it offered nothing better than extreme rationing of bare-minimum coverage.

    But that political pressure would be the result of an illusion, based on market distortions created by underwriting. Any public policy which permits underwriting means that private insurance companies get a privilege, permitting them to lay off risk on the public—but pay no extra money to the public, to compensate for the public’s increased risks. Instead, the private insurance companies keep that money. Thus, private insurance companies benefit by a policy amounting to an enormous public subsidy.

    It is hardly surprising that Elizabeth Warren, for instance, does not choose to try to explain all that in one minute. Still less, to explain it to a hostile audience convinced it is entitled to a subsidy which public policy has long accustomed it to receive. But the explanation is there, and it does account for why it might make more sense to outlaw private plans, and go for a single-payer solution instead.

    1. Employer insurance doesn’t look like a great deal to me. If I had the money employers have paid for my insurance over the years, I’d be in a fine position to pay out of pocket for just about anything I’m likely to need. And if true catastrophic insurance were allowed, I’d be covered for anything. As it is, a huge amount of money has been spent on pretty much nothing.
      Let’s start by removing the incentives for employers to provide insurance rather than other forms of compensation and mandates on what kind of insurance must be offered.

  5. “But the explanation is there, and it does account for why it might make more sense to outlaw private plans, and go for a single-payer solution instead.”

    The “explanation” you provide is pure bullshit. Underwriting doesn’t distort markets, as you stupidly claim. EVERYONE has to do some sort of underwriting. Pretending that government doesn’t have to, thus can save money is to lie through your fucking teeth. Government has to stay profitable, the same as any business. You can’t spend more than you generate in revenue and credit. That’s true for EVERY. SINGLE. ORGANIZATION. ACROSS. ALL. TIME. AND. PLACE. Politicians can magic away the basic laws of reality. Stop pretending they can.

    The other bullshit you gloss over, while complaining about it, is employer tied healthcare insurance. This is due 100% to government intervention. In fact, 100% of everything that is wrong with medical care is due to government intervention, largely because assholes like you pretend you know what type of healthcare I want and need, then go about taking my money to buy that healthcare, while completely ignoring what I ACTUALLY want and need.

    1. THX, k001.
      I was about to respond to but one more of Lathrop’s efforts to prove himself among the dimmest commenters who post here, and you beat me to it.
      Lathrop, you might try reading something about the continuing government price fixing after the end of WWII in the doubtful case you’d like to learn something and not make an ass of yourself again.

    2. khm001, I can see from your response that I should have made that much simpler. I will try.

      The problem is that the private sector is not doing the job on health insurance. The job is to deliver a system of health insurance which adequately covers health care needs alike for everyone. Not even free market ideologues suppose the private sector can do that job, or even wants to do it.

      By default, that leaves government. Government needs to deliver for everyone an insurance system approximately as good as the private sector can do for a preferred minority. That means government needs access to young, healthy, high-earning premium payers, to match the access the private sector now relies upon.

      Even then, government’s task will be difficult. Government honors continuing obligations to more-risky insureds, people the private sector shuns. Thus, realistically, adequate government insurance for everyone may fall short of optimal private insurance for a few. Some of that difference, maybe not all of it, can be made up by the negotiating power government can use in bargaining for healthcare services, especially with regard to pharmaceuticals.

      Could there be an accommodation, based on rival public and private systems, competing against each other? In any system which pits private insurance against government insurance, private underwriting will strive to assure that the government gets the elderly, the sick, and the poor, while private companies take the young, the well, and the prosperous. That spells failure for government insurance, and failure to get the job done for the nation. Thus, for the sake of the general welfare, that kind of public–private rivalry is best avoided.

      If a bit of it were to be saved, it ought to depend on strict rules to prevent private underwriting from undermining government insurance programs. It might be that the private sector would have no appetite for such rules, and shun the business altogether.

  6. Absent all these discussions is the question of what should be covered by insurance, because in the end a big source of the problem is agency: the consumer of health care is not the one paying for it. At least Delaney raised the question obliquely. I pity his political future.

    1. Warren went off on him (pro private sector, gasp) and the crowd sounded off gladiator applause. Every good democrat knows that the government in Detroit has done much better for the people and the city than the private sector. I actually feel bad for the guy.

  7. ‘This Isn’t About Health Care, This Is an Anti-Private Sector Strategy’

    Well, you have to give this socialist turd credit for being honest.
    You didn’t get that from all those other ass wipes pontificating about “medicare for all.”

  8. Wow, Delaneys plan is pretty free market. Although– the devil is in the details, does it start paying on a percentage of AGI? Is something like breast cancer treatment covered under the catastrophic plan with the deductible waived for 10 years or so? Do illegal immigrants, refugees and any visitor to the U.S. cover under this (if they come in knowing they have a catastrophic illness)? Are pediatrics exempt (similar to Obamacare)? Who writes the exemptions, the AMA? So much room for corruption, its hard to know where to begin. Isn’t big government wonderful!

  9. Crying that killing private insurance companies is somehow evil really isn’t a convincing argument. I think we should also have auto insurance by the government only as well – for like an extra $5 when you register your car or get a DL. To hell with all private insurance scams – anything you want to buy from then should be totally optional, and would encourage them to cutthroat price wars for what business they did get.

  10. While the former congressman didn’t focus on the roughly $32 trillion cost of the program, he did argue that it would restrict choice.

    You just have to follow the link to discover that is not even a little bit forthright. What it leaves out is that the study says approximately $26 trillion of that is money already being spent—by state and local governments, and by employers.

    There is so much speculation in a 10-year projection that I don’t think it is reasonable to much credit that analysis, one way or the other. One major stumbling block could arise in figuring how the federal government could capture expenditures now being made by others.

    Conceding all that, the OP cited the study tendentiously, with an eye to creating confusion, not clarity.

  11. That is the very definition of insurance. Insurance is perverted when it is a collectivized program of routine spending.

    It needs to be separated from employer plans in general, that is a legacy of WW2 price controls.

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