President Donald Trump and the Republican Party have aggravated public anxieties by failing to produce a credible plan for controlling health care costs and covering the uninsured. Instead, they have waged a partisan crusade to kill the Affordable Care Act (ACA), which protects Americans with preexisting conditions and has enabled 17 million people to get insurance coverage. Even after suffering a clear rebuke from voters in the 2018 midterm elections, Trump Republicans persist in trying (3) to sabotage the ACA in the courts. Thus it is no wonder Americans trust Democrats more than Republicans to address their health care anxieties. (4)
Democrats, however, could squander that trust by overreaching. That’s the danger posed by several leading 2020 presidential candidates endorsing the abolishment of private insurance and replacing it with a government-funded, national health care system. It would require a staggering $32 trillion in new government spending over ten years and would massively disruptive coverage for the 155 million Americans forced to give up their employer sponsored insurance, risking a public backlash of seismic proportions. (5)
Furthermore, without transforming the delivery and payment system structure, a fee-for- serviced based Medicare-for-All program would not necessarily improve outcomes or restrain cost growth over time. Without reform, it would likely entrench fee-for-service medicine and limit the spread of accountable care arrangements that pay for prevention, wellness and healthier outcomes for patients.
The United States spends 18 percent of its gross domestic product on health care – almost one and a half times more than Switzerland, the country with the second-highest rate of healthcare spending. (6) Yet outcomes here are worse than in other advanced countries. Compared to the health care systems of 10 other high-income countries, the United States ranks last in access, equity, and overall health status. (7)
With increasing premiums, co-pays, drug costs, and surprise bills, it’s not hard to see why middle-class families are feeling the squeeze. Americans spend more on medical services because prices here are higher than elsewhere. Our system is fraught with waste, our providers (physicians and hospitals) are paid more, and goods like biopharmaceuticals and medical devices are more expensive. (8) On average, U.S. hospital prices are 60 percent higher than countries in Europe (9) and physicians make twice as much as their counterparts in other advanced countries. (10)
Americans shell out an average of $10,739 per person per year on medical care. (11) Families pay $5,547 annually toward their employer-sponsored coverage, which costs roughly $22,885 for a family of four. (12) (13) Out-of- pocket costs have grown from $601 per person in 1970 (in 2017 dollars) to $1,124 per person on average in 2017. (14) Over the next decade, the Centers for Medicare and Medicaid Services (CMS) predicts that half of the estimated 5.5 percent average annual growth in health care spending will come from price increases, while just a third of the spending growth will come from greater consumption of health care services, even as the huge baby boomer generation ages and needs more care. (15)
For too long, however, the health care debate has been focused on who pays for care and what is covered rather than on why health care costs so much in the first place. Republicans routinely push to move the cost of care onto individuals and away from government subsidies, while Democrats go after short-term junk health insurance policies, huge drug price increases, and surprise health care bills. As former Oregon Gov. John Kitzhaber, MD illustrates, this framing presents Americans with a false choice between cost and access. (16)
Medicare-for-All may be bold, but in essence it’s just a financing mechanism and without necessary delivery reform will not improve America’s flawed health care system. In this report, PPI offers a progressive alternative to Medicare-for-All aimed at lowering the overall cost of medical care and creating stronger incentives for reform and better health outcomes.
Affordable Health Care for All is a comprehensive plan to discipline medical prices, plug gaps in coverage and bring Medicare and Medicaid into the 21st century. It would cap medical costs and encourage insurers to pay for the value, not the volume, of medical services. By reducing
the overall cost of medical care in America, this plan also would free up resources that can be invested in housing, nutrition, public safety and other social initiatives that improve public health and keep people from needing medical care in the first place.
Progressives don’t need to import “single payer” plans from other countries to solve our health care problems. PPI’s plan offers a distinctively American solution to high costs and coverage gaps. It would leave room for choice and competition; promote more efficient use of health care resources; and, put America in the vanguard of medical research and innovation – all while protecting Americans from outrageous health care prices.
Affordable Health Care for All has five key components:
Read the full report:
