The race for the Democratic nomination for President has now become a one-on-one affair, Joe Biden vs. Bernie Sanders. Sanders has made his healthcare plan — Medicare for All — the centerpiece of his campaign. Biden’s alternative — a variant of the public option approach — has received less publicity. It’s time for an update, based partly on a longer commentary on Biden’s plan that I wrote last summer.
In a March 4 interview with MSNBC’s Rachel Maddow, Sanders touted the growing popularity of Medicare for All. “The last poll that I saw,” he said, “60 or 70 percent of the American people believe in a Medicare-for-All, single payer program.” We don’t know what poll he was referring to, but going by the widely cited Kaiser Family Foundation tracking poll, support for Medicare for All was running at 56 percent in January, up from 51 percent last June. That doesn’t quite meet Sanders’ numbers, but his general point about the popularity of Medicare for All appears to be valid.
It turns out, though, that a public option polls even better. Kaiser puts support for a public option at 68 percent, as of January.
What is more, it seems many supporters of Medicare for All don’t understand the difference between the two plans. Writing this week for Axios, Kaiser’s Drew Altman notes that 47 percent of those polled think that people would be able to keep their employer-sponsored insurance under Medicare for All, and 48 percent think they would be able to keep their private coverage. Neither is true. Support for Sanders’ plan drops in polls where those points are clarified.
So what, exactly, is in Joe’s plan?
A public option
The centerpiece of the Biden plan is a Medicare-like public option for people seeking individual coverage on the ACA exchanges. It would be offered as an alternative to private insurance, not as a replacement.
The hope is that the competitive discipline of the public option would encourage private insurers to keep their own prices low by use of preferred provider networks and other cost-saving strategies, while plowing the savings back into added features like dental and vision coverage. If private networks were too narrow or if insurers were too aggressive in denying legitimate claims, consumers could turn to the public option. If the public option turned out to be too bureaucratic, if it paid such low rates that it failed to attract quality providers, or if it imposed long waiting times, people would spurn it in favor of private plans.
Income-based premium subsidies
The Biden plan would enhance premium subsidies for insurance purchased on ACA exchanges. Subsidies would be calculated on the basis of a gold plan rather than a sliver plan, as they are at present. They would be scaled so that premiums would consume no more than 8.5 percent of family income. Currently only families and individuals with incomes less than 400 percent of the federal poverty level are eligible for premium subsidies; that cap would be lifted.
The Biden plan seems to be based, at least in part, on the Healthy America program from the Urban Institute. If so, the Biden plan would presumably also retain or enhance existing cost-sharing reductions that provide income-based limits on out-of-pocket costs.
Employer sponsored health insurance
Almost half of all Americans get their health insurance coverage through their jobs, a unique and much-criticized element of the U.S. health care system. Three features of current law support employer-sponsored coverage: a mandate that requires large employers to provide coverage; tax-deductibility of premiums; and a provision that says that workers who receive an affordable offer of coverage from their employers are ineligible for subsidies if they switch to private plans offered on the ACA exchanges.
The third feature is often called the “firewall” because it keeps workers in employer-sponsored plans even if their friends and neighbors are getting a better deal on the ACA exchanges.
Biden’s plan leaves the first two features in place, but lifts the firewall. That would be a better deal for many low-paid employees, who would get generous premium and cost-sharing subsidies either for private plans or the public option on the exchanges.
The Biden plan retains Medicaid as the primary vehicle for delivering health care to people with low incomes. The 36 states that participate in expanded Medicaid under the ACA would be allowed to continue their current programs, or could instead switch coverage to the new public option, provided they continued to pay their current share of the costs. In the 14 states that have not offered expanded coverage, low-income residents would be eligible for zero-premium coverage under the new public option.
The Biden plan would also introduce a limited version of automatic enrollment in the public option for low-income families who interact with public institutions in certain ways, for example, students in public schools and families receiving food stamp benefits.
The bottom line
Health care is sure to be a central issue in the Sanders-Biden race to the convention. Many Sanders supporters will continue to be rock-solid for his promise of a plan with no premiums, no deductibles, expanded vision and dental coverage, and all the rest. But, if recent polling is to be believed, Biden’s public option is a very competitive alternative.