Thursday, December 20, 2018

Details as Distractions in Medicare-for-All and Social Security Debates

by Neil H. Buchanan

As I noted in a column last week, conservative politicians and pundits are becoming increasingly frantic about the possibility of the U.S. actually moving to a single-payer health care system, the most likely version of which would be an expansion of the current Medicare system to cover people of all ages, not just those over 65 -- that is, Medicare-for-All.

Viewed as a political moment, this panic is important simply because it represents a return to form for those conservatives who have strayed from their lifelong paths by opposing Donald Trump and all that he represents.  One might have been forgiven for thinking that prominent NeverTrump pundits had become policy moderates -- people who, once hit with the bucket of ice cold water that is the combination of Trump and movement conservatism, suddenly woke up and realized that perhaps one's highest calling in life should not be to justify tax cuts for the wealthy or throwing tens of millions of people off of Medicaid.

But in the end, the people who had stuck with the Republican brand even after the madness of the Tea Party-fueled rage against Obama are not likely converts to centrism.  Thus, even the pundit who seemed to have made the most substantive progress in her views, The Washington Post's Jennifer Rubin, apparently was unembarrassed to ask earlier this week: "[W]hat’s the alternative to the left-wing infatuation with super-centralized government, anti-capitalism and retrenchment?"  Yes, she actually wrote that -- and she is supposed to be one of the reasonable ones.

Unless "super-centralized government" is merely a muscle-memory way to insult liberals that has no actual content (which is a very real possibility), this kind of comment must surely be of a piece with the fatuous claim that expanded Medicare is bad because it would mean higher taxes -- even though those taxes would replace health insurance premiums, co-pays, coinsurance, deductibles, and every other part of the clip-joint scheme that is the U.S. private health insurance system.

This return to form on the center-right suggests that there will be no kumbaya moment for the 60 to 70 percent of Americans who abhor Trump and his enablers.  If there is going to be progress on anything, most certainly including health care policy, there will have to be a real debate that includes dealing with red herrings and bad-faith objections.  It must also, however, deal with real concerns.  Here, I want to discuss how the fact that "it's complicated" plays out in good-faith policy discussions.

In that column last week, "What Bothers People About Medicare-for-All, Really?" I noted that the right-wing objections to a single-payer system amount to misunderstandings about health care economic reality, ideological objections, or appeals to political "reality."  But what about people who see the pluses but have genuine concerns about any minuses -- what we might call the Medicare-for-All Curious?

Some very good comments on my column echoed arguments made in the broader political discussion, raising some important questions.  One initial concern is that the current policy discussion among Democrats is more a matter of rhetoric than reality, that it is all too easy to be in favor of "Medicare for All" when there is no firm content to that phrase.  Is that a fair assessment?  Yes and no.

It is certainly true that Medicare-for-All became a buzzword among Democrats in 2018, and I have seen reports suggesting that some Democratic candidates claimed to be in favor of it even though they did not know what it meant.  Being in favor of a notion is easier than being in favor of something specific.

But that is always true in politics.  On both the left and the right, there are plenty of people who are absolutely certain that "deficits are bad," but when pressed, they could not explain why.  They just have a gut feeling that Shakespeare's admonition, "neither a borrower nor a lender be," is an eternal verity -- even though Shakespeare meant only that friends should not borrow from friends.  But when the time comes to do the things that are required to reduce deficits -- cut spending and/or increase tax revenue -- those same people lose enthusiasm.

Perhaps, then, the Medicare-for-All boomlet will be a passing thing, and people will lose interest once they start to think about fuller details.  Even so, it is surely not true that there are no detailed proposals on offer, nor is it true that even the vaguer plans are nothing but feel-good exercises.

The Center for American Progress, as close to representing the slightly left slice of "the Democratic Establishment" as one could find among think tanks, earlier this year published a nicely detailed description of what they call Medicare Extra, which does not fill in every policy detail but does do important things like explaining how the transition could work, how people with employer-provided health insurance would be affected (they could choose to stand pat), and other policy wonkery.

Although some liberals might be hiding behind vagueness, therefore, others are certainly not.  Moreover, if Medicare-for-All were truly a content-free label, then there would be no reason for people on the right to oppose it.  After all, soon-to-be-blessedly-former House Speaker Paul Ryan proposed gutting the actual Medicare program and replacing it with a fully privatized voucher program (where the vouchers would become increasingly inadequate over time), but he called his system Medicare.

If conservatives can get excited about a plan that is not Medicare but that is still called Medicare, then obviously they are not scared off by that word.  Yet they (including, as above, supposed apostates like Rubin) are freaking out about Medicare-for-All.  They have reasons -- bad reasons, indefensible reasons, but reasons nonetheless -- for opposing something that is still mostly a general idea rather than a specific and enactable legislative proposal.

They know, in other words, that Medicare-for-All means something, and they hate it.  Similarly, the people who are in favor of one or more versions of Medicare-for-All are in favor of something identifiable and appealing: universal health care coverage, at least in part provided by a government entity.  This is not an imaginary difference between left and right.  Both sides know what is at stake.

But of course, the details matter, and soft support can evaporate when some details are filled in.  Even there, however, it is important to understand that part of the strategy for opposing Medicare-for-All is to invoke detailed questions as if they are an essential part of the story.  Often, however, those details are mere distractions.

One concern, which has been given heightened political salience because of Barack Obama's fateful claim that "you can keep your doctor" under the Affordable Care Act, is whether any particular health care system would limit (or eliminate) people's choices of doctors and other providers.  Would Medicare-for-All "take my doctor away from me"?

The answer is not merely that we cannot know until we fill in the policy details, although that is true.  The larger point is that there is simply no connection between a health care system's financing mechanism and whether that system will preserve patient choice.  After all, when HMO's became a big deal in the 1990's, one of the complaints was that they were requiring people to use only "in network" doctors and hospitals.

More simply, single-payer systems and fully private systems (and everything in between) could all limit patients' choices.  Or not.  There is no inherent link between the type of system and this very personal matter.  But because opponents of Medicare-for-All know that this is politically salient, they will stoke the fear that any change in the system will take away what people care about.  In turn, people of good faith can be distracted by such sub-issues and oppose a new system for no good reason.  The fight for such people should be to enact Medicare-for-All with patient choice.

There is a similar dynamic in debates about Social Security.  Having been studying and writing about Social Security for decades now, I have noticed how easy it is to distract people with non-issues.  "You could do better investing your money in the stock market, so Social Security is a rip-off!"  "Social Security allows old people to steal money from younger people, because there is nothing real in the Trust Fund!"  And so on.

For each of those claims, there is a complete response.  From a political standpoint, however, what matters is only whether the intended audience can be scared into focusing on a sub-issue (or a complete fabrication).  The long-term strategy on the right has been to win over younger people by convincing them that Social Security is rigged against them, a strategy that involves throwing out claims about "rates of return" and other sophisticated-sounding issues that people do not truly understand but think should worry them.

Interestingly, the process of throwing out those talking points to confuse voters serves a concurrent purpose in occupying the minds of the policy wonks.  Whenever I present my work on Social Security to tax law scholars, for example, I am constantly amazed by how many of the questions relate to little policy puzzles that the questioner is interested in.  What would it take to replicate Social Security as a private annuity?  Is the Trust Fund technically solvent?  How much could you save by taxing benefits above $x?

As a policy wonk myself, I sincerely understand the joy of diving into those questions.  Doing so, however, inadvertently serves the purpose of muddying the waters with a bunch of technical questions that convince people that "this is all so complicated, and even the experts can't agree."

Again, moving to a system that deserves the Medicare-for-All label will involve many choices, some of which will be hugely consequential while others are simply decisions that must be made in order to have a working system.  But we -- both the voting public and, perhaps more importantly, policy analysts -- must simultaneously sweat the details while not allowing them to consume the debate.


David Ricardo said...

As a charter member of the Medicare for All Curious I applaud Mr. Buchanan's past which is hopefully the beginning of a movement away from an ephemeral idea and towards a specific concept that provides for quality, universal health care that is accessible independent of one's financial means. And thanks for the link to a somewhat specific proposal. But it should be noted that the CAP plan is actually an entirely new program that carries the Medicare brand name for reasons that are not clear.

One problem with Medicare for All is that many Americans who are not on Medicare think that it is free government health care. Mr. Buchanan rightly complains about the falsehood that expenses would increase becauses the taxes to fund Medicare for All would be less than the current cost,

“- even though those taxes would replace health insurance premiums, co-pays, coinsurance, deductibles, and every other part of the clip-joint scheme that is the U.S. private health insurance system.”

but guess what, Medicare today has all of those things.

And exactly how the tax system that would replace employer premium subsidies would work is also a total unknown.

Medicare is an individual plan, largely covering the retired. Employer sponsored/subsidized plans are family plans. The CAP addresses this issue, somewhat, but how is the premium payment system set up for a family in Medicare? And what about the primary driver of inflation in health care, the fee-for-service system?

There are a lot of other issues, such as the role of Medicare Supplemental plans and Medicare Advantage but this Forum is not the place to argue those issues. Suffice it to say, as Mr. Buchanan recognizes one can be for universal health care access and be against Medicare for All until a specific proposal with a discussions of costs, benefits covered and tax funding has been developed. And in the end, until the politicians, who seem to know the least about the economics of health care, actually come forth with specifics one is not optimistic that health care in the nation will get better.

Greg said...

While I'm sure there are a number of Medicare-for-all options, I want to point out that some of the assumptions here are not necessarily correct.

I was a big believer in the public option when it was first proposed during the ACA debates, and continue to believe in the proposal today. A public option can be presented just like any other insurance option, where the patient pays fees (notice I didn't say taxes) to the insurance provider (in the public option case, the government) in exchange for certain coverage. These fees would be subsidized by the ACA benefits in the same way that coverage on the exchanges is subsidized. If the public option offers a better value than private insurance, then over time individuals will change to the public option due to normal market forces.

It's conceivable that under such a system taxes applied to health care would go down, because fees for the young and healthy would offset medical care consumption by older individuals.

Issues like how to handle employer health care subsidies and family plans would need to be addressed, but these don't seem insurmountable in the above framework. Moreover, while falling under the "Medicare-for-all" umbrella, this is more like "Medicare-for-sale." It's a reasonable market-based compromise that preserves market forces and should allow a smooth transition. Under such a system, we can make minor tweaks to the subsidies and "default" coverage when no selection is made to make it act more like universal healthcare.

Of course, being a compromise, something like the above probably has no hope of getting through congress.

David Ricardo said...

The ACA is not designed for the majority of the population who have health insurance through employer subsidized group family and individual plans or insurance from Medicare or insurance from Medicaid or insurance from the VA. The ACA and its Exchanges was created to cover those individuals and families that were excluded from the above groups.

The public option was proposed when it was feared that private insurance companies would not sponsor plans on the exchanges. At this point in time it appears that concern is somewhat moot, although enrollment may have declined for 2019 and that may push up prices and lower the number of available plans for the 2020 enorollment next fall. In that case a public option may be appropriate, but it would not be Medicare as that program is designed for individuals who are retired or close to retirement without family dependents.

Shag from Brookline said...

While I do not basically disagree with David's first paragraph in his 8:40 PM comment, keep in mind this post at Balkinization:

Monday, December 17, 2018
"All the Things You Don’t Realize Are in the ACA and Now Could Vanish" by Abbe Gluck

about protections provided by ACA to employer provided health insurance, Medicare, Medicaid and beyond. Saving ACA as amended from Judge O'Connor's decision is vital for many pending congressional debate/action on universal health coverage. As Prof. Gluck points out many benefit from ACA, which could be lost if ACA were to be declared unconstitutional. Richard Primus and Nicholas Bagely have some suggestions for action the incoming Congress might take to thwart Judge O'Connor's decision with a link at Balikinization on a recent post by Primus. While the long term goal should be universal health care, steps can be taken to keep ACA effective.