Trump Claims Democrats’ Health Plan Would Destroy Medicare As We Know It. Sense or Nonsense?
President Trump is rebranding himself as the defender of Medicare against Democratic plans that he claims will destroy it. “They’re going to ruin your Medicare,” he said at recent rally in Montana.
They want to turn America in to Venezuela. I don’t think so. Democrats would destroy Medicare with ‘Medicare for All’ — you heard that — ‘Medicare for All,’ until they run out of money, which would be like in the third day.
Does that make any sense, or is it just fear mongering? At first glance, it seems like a strange claim. After all, Bernie Sanders’ proposal for Medicare for All, a favorite of progressive candidates in this fall’s election, promises clear advantages to people already on the current version of Medicare. They would no longer have to pay the modest deductibles and copays now required, they would no longer face lifetime caps on hospital days, and they would qualify vision and dental services that are now not covered. True, Medicare for All would be expensive, but under Sanders’ proposal, it would be fully funded by a combination of premiums and tax increases.
There are, however, some scenarios under which Trump’s warnings could conceivably come to pass. One is that Democrats, in a future, narrowly-divided Congress, might be able to pass legislation enacting the benefits of the Sanders plan, but not the tax increases needed to pay for it. In that case, funds to implement the plan might run out, causing doctors and hospitals to turn patients away unless they paid cash.
Another source of possible trouble lies in a feature of the Sanders’ proposal that would reduce payments to all doctors and hospitals to the relatively low rates now paid for Medicare patients. Those low rates might lead some providers might opt out of the system, as permitted by Section 303 of Sanders’ bill. They could then enter into private contracts at any prices they chose. The result would be a parallel private medical system similar to the one that now exists in the UK. If enough providers opted out, Medicare for All patients might face longer waiting times or lower quality services than those receiving services under Section 303 private contracts.
Could those unintended consequences of Medicare for All be avoided? Yes, if Democrats opted for a more affordable version of Medicare for All — one that still guaranteed universal, affordable access to health care services but did so at a more realistic cost. The best way to do that, in my opinion, would be to introduce a system of income-based deductibles that would ensure that middle- and upper-income households paid a fair share of their routine medical costs, while still receiving full protection against financially ruinous major illnesses.
One way to do that would be to adopt a system of universal catastrophic coverage (UCC). Under a UCC version of Medicare for All, everyone would automatically get coverage similar to today’s Medicare or Medicare Advantage policy, with no premium and no copays. For families below the poverty level the deductible of the policy would be set at zero. For others, it would be set as a percentage (say, 10 percent) of the amount by which household income exceeds the poverty threshold.
The Medicare Extra proposal from the Center for American Progress (CAP) would work much the same way. Medicare extra, like UCC, would also require middle- and upper-income households to pay part of their own health are costs through a system of income-based premiums, deductibles, and copays. (See this earlier post for a detailed comparison of the UCC and Medicare Extra alternatives.)
My analysis of the costs of UCC suggest that such a program could be implemented by using federal funds already committed to Medicare, Medicaid, and other health care programs, without additional taxes. CAP estimates for the cost of Medicare Extra also come in far below those from the full Sanders plan.
The bottom line: The latest GOP efforts to scare voters into thinking that Democrats would destroy Medicare as we know it are misplaced. If Democrats were to gain control of Congress and the White House in future elections, I am sure that they would move forward with some kind of reform that would guarantee affordable health care to all Americans. However, during the legislative process, there would be a head-to-head collision between campaign promises and economic realities. The result would be a system that looked much more like universal catastrophic coverage or Medicare Extra than the caricature of Venezuela-style “socialized medicine” that Republicans are using to frighten the electorate.