The New York Times - 30.07.2019

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A20 0 N THE NEW YORK TIMES NATIONALTUESDAY, JULY 30, 2019


Senator Kamala Harris of Cali-
fornia, who is increasingly seek-
ing to carve out an ideological lane
separate from the most progres-
sive Democrats running for presi-
dent, laid out a new plan Monday
for providing Medicare for all
Americans, with a twist that stops
short of the complete overhaul of
the health insurance system that
Senator Bernie Sanders of Ver-
mont has proposed.
Ms. Harris’s announcement
comes as the Democratic candi-
dates are preparing for a fresh
round of debates this week, and as
she faces mounting pressure to
clarify her stance on the issue af-
ter repeated missteps. It also
comes as fellow candidates, such
as Mr. Sanders and former Vice
President Joseph R. Biden Jr.,
have sparred over health care in
recent weeks.
The issue has become a litmus
test among the 2020 Democrats,
separating the candidates of the
progressive left, who want to
move rapidly toward a single-pay-
er health care system, and the
more moderate contenders, who
favor other ways of expanding
coverage and lowering costs.
Ms. Harris’s proposal seeks to
straddle both camps, using the
“Medicare for all” mantra as a
long-term target while also seek-
ing to keep a significant role for
private insurers — which Mr.
Sanders’s plan would eliminate.
Instead of completely replacing
private coverage with a govern-
ment-run, single-payer system
based on traditional Medicare,
Ms. Harris would allow people to
choose plans modeled on Medi-
care Advantage, which would be
run not by the government but by
private insurers. More than one-
third of the Medicare population
already chooses Medicare Advan-
tage, which offers extra benefits
and limits out-of-pocket costs but
is strict about which doctors and
hospitals enrollees can use.
“Essentially, we would allow
private insurance to offer a plan in
the Medicare system, but they will
be subject to strict requirements
to ensure it lowers costs and ex-
pands services,” Ms. Harris wrote
in a post on Medium. “If they want
to play by our rules, they can be in


the system. If not, they have to get
out.”
Ms. Harris’s plan would also al-
low people to choose a somewhat
expanded version of traditional,
government-run Medicare. But
by preserving a major role for pri-
vate insurers — and calling for a
10-year phase-in period instead of
the four-year transition that Mr.
Sanders envisions — it could po-
tentially draw less opposition
than Mr. Sanders’s plan from in-
surance companies, many of
which have profited handsomely
from Medicare Advantage plans.
For now, though, the industry
signaled it was not backing down.
“Like other plans, this proposal
puts us on a slippery slope to
Medicare for all, and does nothing
to address our top health care
challenge: out-of-control costs,”
said Kristine Grow, a spokeswom-
an for America’s Health Insurance
Plans, a trade group for insurers.
“People will have to pay more, to
wait longer, for worse care. Our
top health care priority needs to
be making health care more af-
fordable for all Americans.”
Tricia Neuman, who directs the
Medicare policy program at the
Kaiser Family Foundation, said a
big question was whether the pri-
vate plans Ms. Harris would offer
under the Medicare imprimatur
would appeal to consumers.
“The appeal of private Medi-
care Advantage-type plans may
boil down to whether the plans of-
fer better benefits, with lower
costs, and what the provider net-
works look like,” Ms. Neuman
said. “So, a key question is how in-
surers will be able to differentiate
themselves from the public pro-
gram.”
At the Democratic debate this
week in Detroit, Ms. Harris is
likely to face questions about her
previous statements on health
care, in which she has oscillated
between supporting Mr. Sanders’s
more robust proposal and reject-
ing its most controversial parts,
like tax increases on some middle-
class families.
Ms. Harris’s advisers said she
wanted a plan that more closely
reflected her values to lay out on
the debate stage. But while her
proposal draws specific contrasts
with Mr. Sanders’s, the two candi-
dates will debate on separate

nights this week. Both are in the
tier of candidates below Mr. Biden
in current polling, along with Sen-
ator Elizabeth Warren of Massa-
chusetts.
Both Ms. Harris and Mr. Sand-
ers call their plans “Medicare for
All,” but on Monday Mr. Sanders
attacked her plan as unworthy of
the name.
“I like Kamala. She’s a friend of
mine. But her plan is not Medicare
for All,” Mr. Sanders said in an in-
terview on CNN. “What Medicare
for All understands is that health
care is a human right and that the
function of a sane health care sys-
tem is not to make sure that insur-
ance companies and drug compa-
nies make tens of billions of dol-
lars in profit.”
Ms. Harris’s plan appeared in-
tended to put to rest confusion
over her past statements on abol-
ishing private health insurance.
At a CNN town-hall-style event in
January, Ms. Harris responded to
a question about private insur-
ance by saying, “Let’s eliminate
all of that.” And at the first debate
last month, Ms. Harris raised her
hand when the candidates were
asked if they favored getting rid of
private insurance. In both cases,
she attempted to clarify her posi-
tion after the events.
But Ms. Harris’s proposal still
leaves open questions, including
how the longer transition period
would play out. During those 10
years, newborns and the unin-
sured would be automatically en-
rolled into a “new and improved”
Medicare system, according to
the Harris campaign, and all
Americans could buy into the pub-
lic program.
Ian Sams, a spokesman for Ms.
Harris, said in an email that her
plan, like Mr. Sanders’s, would
limit everyone’s annual out-of-
pocket costs to $200.
Mr. Sanders’s plan, by compari-
son, would allow everyone 55 and
older to join Medicare in the first
year, and would move everyone
into Medicare by the fourth year.
Ms. Harris was also eager to
draw a contrast with Mr. Sanders
over the extent to which they
would ask the middle class to help
pay for their plans. Mr. Sanders
has raised the possibility of impos-
ing premiums equaling 4 percent
of people’s income after the first

$29,000 for a family of four. Critics
have assailed that provision as po-
litically unpalatable, but Mr. Sand-
ers has said that families’ overall
health costs would be signifi-
cantly reduced.
Ms. Harris, on the other hand,
would “exempt households mak-
ing below $100,000, along with a
higher income threshold for mid-
dle-class families living in high-
cost areas,” according to her Me-

dium post.
In the post, Ms. Harris made
her version of Medicare for all
sound similar to Mr. Sanders’s in
terms of benefits. She said it
would cover “all medically neces-
sary services, including emer-
gency room visits, doctor visits,
vision, dental, hearing aids, men-
tal health and substance use dis-
order treatment, and comprehen-
sive reproductive health care
services.”
Like Mr. Sanders, Ms. Harris
did not provide specific details of
how she would pay for her plan
but said she liked several of his
ideas, especially imposing higher
taxes on corporations and the top

1 percent of earners. She also said
she liked the idea of modest in-
creases in employer taxes to help
pay for her plan; Mr. Sanders has
suggested a 7.5 percent payroll
tax on employers.
Mr. Sanders ran on the idea of a
single-payer system in his 2016
presidential campaign, and his
proposal has largely set the tone
of the health care debate this time
around.
Ms. Warren, another liberal
Democrat who co-sponsored Mr.
Sanders’s bill, used the first de-
bate as a moment to leave no
doubt that she stood with him.
“I’m with Bernie on Medicare for
all,” she said.
Mr. Biden has moved in the op-
posite direction. In recent weeks,
he has ramped up his criticisms of
Medicare for all, seeking to con-
trast himself with the senators
looking to supplant him atop the
primary polls.
Most of the other Democratic
candidates have also called for
keeping private insurance while
offering some kind of public op-
tion.
Mr. Biden has even veered into
language that mirrors attacks Re-
publicans have used to disparage
the idea of a single-payer system.
“Come on, what is this, a fantasy
world?” he said at a campaign
stop in Michigan last week, refer-
ring to Medicare for all. (He and
Ms. Harris will stand next to each
other on the debate stage on

Wednesday; Mr. Sanders and Ms.
Warren will be onstage Tuesday.)
One criticism of Medicare Ad-
vantage plans is that the insur-
ance companies that offer them
manage to make big profits by lur-
ing the younger, healthier seg-
ment of the Medicare population
and by doing things like requiring
prior authorization for certain
care to control costs.
Seemingly nodding to the con-
cern that Medicare Advantage
plans have earned some insurers
fat profits, Ms. Harris said she
would be tough on companies that
wanted to offer such plans under
her system, with stricter con-
sumer protection rules than exist
today. She even raised the possi-
bility that insurers would be “re-
imbursed less than what the
Medicare plan will cost to operate,
to ensure they are delivering
meaningful value and unable to
profit off gaming consumers or
the government.”
How that would work — and
how many insurance companies
would agree to be reimbursed less
than what their plans cost to oper-
ate — remained unclear.
“My guess is it’s a nod to the fact
that private plans in Medicare Ad-
vantage today are arguably over-
paid for the services they deliver,”
said Sabrina Corlette, a research
professor at Georgetown’s Center
on Health Insurance Reforms.
Ms. Corlette, who was on a list
of analysts the Harris campaign
provided to reporters, said that
while she was not endorsing the
plan or Ms. Harris, “I think it’s a
great step forward that this cam-
paign is putting some deeper pol-
icy thought into how to execute
the senator’s vision and what it
will take to get there.”
Ms. Corlette said she thought a
10-year transition was more real-
istic than the four-year phase-in
proposed by Mr. Sanders. But she
acknowledged that drawing out
the transition to Medicare for all
would raise the chances that it
would never happen, given the
number of presidential and con-
gressional elections that would
take place over that time.
“That is a significant issue,” she
said. “On the other hand, to try to
rush this I think raises more risks
than benefits.”

As Rivals Charge Ahead, Harris Charts Her Own Course on Health Care


Senator Kamala Harris offered a plan to provide Medicare cover-


age for all Americans that stops short of a complete overhaul.


DEMETRIUS FREEMAN FOR THE NEW YORK TIMES

By ABBY GOODNOUGH
and ASTEAD W. HERNDON

A proposal for private


plans in the mold of


Medicare Advantage.


It seems a simple enough prop-
osition: Give people the choice to
buy into Medicare, the popular
federal insurance program for
those over 65.
Former Vice President Joseph
R. Biden Jr. is one of the Demo-
cratic presidential contenders
who favor this kind of buy-in, often
called the public option. They
view it as a more gradual, politi-
cally pragmatic alternative to the
Medicare-for-all proposal champi-
oned by Senator Bernie Sanders,
which would abolish private
health insurance altogether.
A public option, supporters say,
is the logical next step in the ex-
pansion of access begun under the
Affordable Care Act, passed while
Mr. Biden was in office. “We have
to protect and build on Oba-
macare,” he said.
But depending on its design, a
public option might well threaten
the A.C.A. in unexpected ways.
A government plan, even a
Medicare buy-in, could shrink the
number of customers buying poli-
cies on the Obamacare markets,
making them less appealing for
leading insurers, according to
many health insurers, policy ana-
lysts and even some Democrats.
In urban markets, “a public op-
tion could come in and soak up all
of the demand of the A.C.A. mar-
ket,” said Craig Garthwaite, a
health economist at the Kellogg
School of Management at North-
western University.
And in rural markets, insurers
that are now profitable because
they are often the only choice
might find it difficult to make
money if they faced competition
from the federal government.
Some insurers could decide that
a smaller and uncertain market
was not worth their effort.
If the public option program
also matched the rates Medicare
paid to hospitals and doctors, “I
think it would be really hard to
compete,” Mr. Garthwaite said.
Even leading insurers do not have
the leverage that the government
has to demand lower prices from
hospitals and other providers.
Whether to implement a public
option or Medicare buy-in has be-
come a defining question among
Democratic presidential candi-
dates and is likely to be a con-
tentious topic at this week’s de-
bates.
On Monday, Senator Kamala
Harris took an alternate route, un-
veiling a plan that would allow pri-
vate insurers to participate in a
Medicare-for-all plan, akin to their
role currently offering private
plans under Medicare Advantage.
The recent spate of proposals
reprises some of the most difficult
questions leading up to the pas-


sage of the A.C.A., in many ways a
compromise over widely diver-
gent views of the role of the gov-
ernment in ensuring access to
care.
After a shaky start, the federal
and state Obamacare market-
places are surprisingly robust, de-
spite repeated attempts by Re-
publicans to weaken them. They
provide insurance to 11 million
customers, many of whom receive
generous federal subsidies to help
pay for coverage.
The A.C.A. is now a solidly prof-
itable business for insurers, with
several expanding options after
earlier threats to leave. For exam-
ple, Centene, a for-profit insurer,
controls about a fifth of the mar-
ket, offering plans in 20 states. It is
expected to bring in roughly $
billion in revenue this year by sell-
ing Obamacare policies.
In spite of stock drops because
of investors’ concerns over Medi-
care-for-all proposals, for-profit
health insurers have generally
thrived since the law’s passage.
But a buy-in shift in insurance
coverage could profoundly unset-
tle the nation’s private health sec-
tor, which makes up almost a fifth
of the United States economy. De-
pending on who is allowed to sign
up for the plan, it could also rock
the employer-based system that
now covers 160 million Ameri-
cans.
In a recent ad, Mr. Biden fea-
tures a woman who wants to keep
her current coverage. “I have my
own private insurance — I don’t
want to lose it,” she says.
A spokesman for Mr. Biden ar-
gued that a public option could ex-
tend the success of the Affordable
Care Act.
“Joe Biden thinks it would be an
egregious mistake to undo the
A.C.A., and he will stand against
anyone — regardless of their
party — who tries to do so,” An-
drew Bates, a spokesman for Mr.
Biden, said in an email.
Major insurers and hospital
chains, pharmaceutical compa-
nies and the American Medical
Association have joined forces to
try to derail efforts like Medicare
for all and the public option. Mr.
Sanders denounced these power-
ful interests in a recent speech.
“The debate we are currently
having in this campaign and all
over this country has nothing to
do with health care, but it has ev-
erything to do with the greed and
profits of the health care industry,”
he said.
Other critics of the public op-
tion, including Seema Verma, the
administrator of the Centers for
Medicare and Medicaid Services,
argue that Democrats’ programs
would lead to a “complete govern-
ment takeover.”

“These proposals are the larg-
est threats to the American health
care system,” she said in a speech
this month.
Some experts predict that pri-
vate insurers will adapt, while oth-
ers warn that the government
could wind up taking on the sick-
est customers with high medical
bills, leaving the healthier, prof-
itable customers to private insur-
ers.
It is uncertain whether hospi-
tals, on the other hand, could
thrive under some versions of the
public option. If the nation’s 5,
hospitals were paid at much lower

rates by a government plan —
rates resembling those of Medi-
care — they might lose tens of bil-
lions of dollars, the industry
claims. Some would close.
One variant of the public option
— letting people over 50 or 55 buy
into Medicare — is often depicted
as less drastic than a universal,
single-payer program. But that
option would also be problematic,
experts said.
That consumer demographic is
valuable to insurers, hospitals and
doctors.
Middle-aged and older Ameri-
cans have become the bedrock of
the Obamacare market. Some in-
surers say that demographic
makes up about half of the people
enrolled in their A.C.A. plans and,
unlike younger people who come
and go, is a reliable and profitable
source of business for the insur-
ance companies.

The aging-related health con-
cerns of people in that group guar-
antee regular doctor visits for ris-
ing blood pressure and diabetes,
and the age group accounts for a
steady stream of lucrative joint re-
placements and cardiac stent pro-
cedures.
The 55-to-64 age group, for ex-
ample, accounts for 13 percent of
the nation’s population but gener-
ates 20 percent of all health care
spending, according to the Kaiser
Family Foundation.
Several experts said designing
a buy-in program that is compati-
ble with existing public and pri-
vate plans could be daunting.
“You’d have to do it carefully,”
said Representative Donna Sha-
lala, a Florida Democrat who
served as the secretary of health
and human services under Presi-
dent Bill Clinton.
Linda Blumberg, a health policy
expert at the Urban Institute, a
nonpartisan think tank, agreed.
“The idea of Medicare buy-ins
was taken very seriously before
there was an Affordable Care Act,”
she said. “In the context of the
A.C.A., it’s a lot more complicated
to do that.”
Many dismiss concerns about
whether insurers can compete.
“Any time a market shrinks in
America, insurers don’t like it,”
said Andy Slavitt, the former act-
ing Medicare administrator under
President Barack Obama and a
former insurance executive. Mr.
Slavitt noted that insurers raised
similar concerns about the federal
law when it was introduced.
“They’ll figure it out,” he said.
In Los Angeles County, five pri-
vate insurers that sell insurance
in the A.C.A. market already com-
pete with L.A. Care Health Plan,
which views itself as a kind of pub-
lic option, said John Baackes, the
plan’s chief executive.
The insurer offers the least ex-

pensive health maintenance orga-
nization plan in the county by pay-
ing roughly the same rates as
Medicare. “We’ve proved that the
public option can be healthy com-
petition,” he said.
But the major insurers, which
were instrumental in defeating
the public option when Congress
first considered making it a fea-
ture of the A.C.A., are already flex-
ing their lobbying muscle and
waging public campaigns.
In Connecticut, fierce lobbying
by health insurers helped kill a
state version of the public option
this spring. Cigna resisted pas-
sage of the bill, threatening to
leave the state. “The proposal de-
sign was ill-conceived and simply
did not work,” the company said in
a statement.
Blue Cross plans could lose 60
percent of their revenue from the
individual market if people over
50 were shifted to Medicare, said
Kris Haltmeyer, an executive with
the Blue Cross Blue Shield Associ-
ation, citing an analysis the com-
pany had conducted. He said it
might not make sense for plans to
stay in the A.C.A. markets.
Siphoning off such a large group
could also lead to a 10 percent in-
crease in premiums for the re-
maining pool of insured people,
according to the Blue Cross analy-
sis. More younger people with ex-
pensive medical conditions have
enrolled than insurers had ex-
pected, and insurers would have
to increase premiums to cover
their costs, Mr. Haltmeyer said.
Tricia Neuman, a senior vice
president at the Kaiser Family
Foundation, which studies insur-
ance markets, said a government
buy-in that attracted older Ameri-
cans could indeed raise premiums
for those who remained in the
A.C.A. markets, especially if those
consumers had high costs.
But some experts disputed that

prognosis, predicting that premi-
ums could go down if older Ameri-
cans, whose health care costs are
generally expensive, moved into a
Medicare-like program.
“The insurance companies are
wrong about opposing the public
option,” Ms. Shalala said.
Dr. David Blumenthal, presi-
dent of the Commonwealth Fund,
a foundation that funds health
care research, said a government
plan that attracted people with ex-
pensive conditions could be costly.
“You might, as a taxpayer, be-
come concerned that they would
be more like high-risk pools,” he
said.
Jonathan Gruber, an M.I.T.
economist who advised the
Obama administration during the
development of the A.C.A., likes
Mr. Biden’s plan and argues that
there is a way to design a public
option that does not shut out pri-
vate insurers.
“It’s all about threading the nee-
dle of making a public option that
helps the failing system and not
making the doctors and insurers
go to the mat,” he said.
Many experts point to private
Medicare Advantage plans, which
cover one-third of those eligible
for Medicare, as proof that private
insurers can coexist with the gov-
ernment.
But the real value of a public op-
tion, some say, would stem from
pressure to lower prices for medi-
cal care as insurers were forced to
compete with the lower-paying
government plans, like Medicare.
Washington State recently
passed the country’s first public
option, capping prices as part of
its plan to provide a public alter-
native to all residents by 2021.
“It’s couched in this language in
expanding coverage, but it does it
by regulating prices,” said Sab-
rina Corlette, a health policy re-
searcher at Georgetown Univer-
sity.
The hospital industry would
most likely fight just as hard to de-
feat any proposal that would con-
vert a profitable group of
customers, Americans who are
privately covered, into Medicare
beneficiaries.
Private insurers often pay hos-
pitals double or triple what Medi-
care pays them, according to a re-
cent study from the nonprofit
Rand Corporation.
While Ms. Shalala supports a
public option as an alternative to
Medicare for all, she is clear about
how challenging it will be to pre-
serve both Obamacare and the
private insurance market. “You
can’t do it off the top of your head,”
she said.

Democrats’ Public Option


Could Bode Ill for A.C.A.


Joseph R. Biden Jr., left, favors


a Medicare buy-in, or public


option, for health insurance.


Two rivals for the Democratic


nomination, Bernie Sanders


and Kamala Harris, support


versions of Medicare for all.


SAUL LOEB/AGENCE FRANCE-PRESSE — GETTY IMAGES

By REED ABELSON

Medicare buy-ins


could destabilize


Obamacare markets.

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