Healthcare policy was the central issue during the 2018 mid-term elections which led to the democrats winning a majority in the House of Representatives.  Among the leaders in the race for nomination for the democratic candidacy the common theme is, ‘affordable healthcare’.  The reason is clear. 95% of Americans say Medicare is important to them!  And no wonder. Approximately 18% of the American Gross Domestic Product (GDP – the value of all the goods and services produced each year) is spent, either by us or by the government, on HEALTHCARE.

Every candidate has endorsed their own distinct health care policy. Bernie Sanders ‘MEDICARE FOR ALL’ is based on a ‘single payer’ concept which would abandon private health insurance plans altogether.  Mike Bloomberg espouses the concept of a PUBLIC HEALTH INSURANCE option run by the government to compete with private insurers and set standards in terms of both cost and effectiveness.

Pete Buttigieg’s healthcare policy has as its ultimate goal ‘universal coverage’, an aim he shares with Sanders. But Buttigieg’s approach is to expand Medicare access to ‘All Who Want It’ (it is currently only available to seniors, and adults with defined chronical conditions).

Buttigieg’s plan for expanding healthcare coverage through Medicare would begin by extending the public insurance option to: –

1. Low-income individuals in states that have refused to expand Medicaid
2. Individuals who forgo (sponsored) employer coverage because it is too expensive
3. Middle-income individuals and families, uninsured because of cost. The intention is to offer subsidies on plans purchased either through the market place or the public option.

The Buttigieg healthcare policy will require drastic changes to the way in which the country divides the spend on funding the health of the nation. On our behalf the federal and state governments spend around $1.5 trillion (Medicare, Medicaid, other insurance programs, and subsidies).  We, the public, spend nearly as much again on co-insurances, co-pays, and deductibles.  In total, as nation we spend 18% of our income on healthcare. 

It is no wonder that ‘would be’ presidents devote so much of their time considering how to spend it and in persuading us that they have the best healthcare policy.

They do have a common goal: to provide accessible health care and consistent high standards of service to the whole US nation.  The word ‘accessible’ is a term which embraces both ‘affordability’ and the ‘geographic’ availability of the necessary services.

The questions is how?

We, the American nation, pay almost 2x the average among the top ten developed nations for our healthcare and on most measures our outcomes are less favorable.  We are neither more efficient nor more effective.

What are the solutions?

BERNIE SANDERS would introduce a universal program called ‘Medicare for all’ under which the benefits provided by Medicare Part A, Medicare Part B, Medicare Part C and Medicare Part D are combined in a single all-embracing healthcare policy called Medicare For All. Implicit in this healthcare policy is the concept of ‘the single payer’ i.e. the federal (state) government.  He argues that this will reduce the inefficiency of having multiple payers (the insurance companies) and multiple suppliers (the health care providers).  It would also reduce/eliminate the role of the health insurance exchanges.  Sanders wants to achieve this in single step. Most healthcare policy analysts, even those sympathetic to the concept, agree that to move from the current mix of public/private funding would be hugely disruptive.

Read more: Bernie Sanders Medicare for all explained

MIKE BLOOMBERG answers the same questions.  He sees value in private insurance and in the need for the security that public funding gives to disadvantaged members of society. He offers to deliver a Medicare level of service provision through an Affordable Healthcare Plan. This plan would be run by the Federal Government with premiums restricted to 8.5% of household income. His plan will be optional.  Those who wish to remain privately insured may do so. Bloomberg expects the cost of private insurance to decrease in the face of a major competitor in the market. Bloomberg offers a long term and sustainable choice for the individual to choose one, the other or a combination.

Read more: Mike Bloomberg’s Affordable Healthcare plan

PETE BUTTIGIEG, like Bernie Sanders, sees Health Care as a right. He has a long-term aim to move from private insurance to solely government-funded programs.  His approach is to offer the option of getting coverage though ‘a public insurance’ alternative.  In this way, Buttigieg hopes that if plans available to you from your employer or on the market place are unaffordable you can choose ‘the public insurance’ alternative and find a plan that is affordable. He distinguishes his position with the slogan ‘Medicare for all who want it’.  He makes no secret of the fact that he expects sustained competition from the public insurance ‘alternative’ to result in a ‘Medicare for all’ outcome.  He makes no prediction as to how long this will take.

THE THREE FRONTLINE CONTENDERS for the Democratic nomination plan to put constraints on the price of branded drugs, and to eliminate the exposure to high costs of unexpected medical bills from out of network providers such as anesthetists and ambulance services. In doing so they will have to battle not only with the House and the Senate but also with the reluctance of the pharmaceutical industry to adapt to new market forces and the task of re-orienting the focus of a workforce numbering 16 million.

Just recently the TrueCoverage team wrote an article ‘MEDICARE FOR ALL EXPLAINED’ and concluded that while the Democratic party had a distinctly different approach to funding national healthcare from the Republicans, they had yet to find ‘a policy which values enterprise and recognizes that the demand for ANYTHING FREE is infinite.’ In this article, we consider Mike Bloomberg’s stand on ACA and his vision of an affordable healthcare plan.

Whereas Sanders talks of ‘Medicare for all’ Bloomberg’s idea is to introduce an affordable healthcare plan, federally run, as a public option alongside the privately insured ACA.  Read about Bernie Sanders take on Medicare for all: Read more

The public insurance option would be aimed initially at the uninsured and low-income families in states which have not expanded Medicaid under ACA.

Mike Bloomberg’s ‘affordable healthcare plan’ can be described as having three objectives. They are to: –

1. Extend coverage to those who cannot afford now afford it
2. Widen the range of health services
3. Reduce/control prices and charges for treatment and medication.

Extend the coverage

The public health insurance (PHI) option would be administered by the federal government (not for profit) but paid for by customer premiums. The same tax reliefs and subsidies would apply as for plans bought on the health insurance exchanges. Individuals would be allowed to keep their private insurances.

At the same time some of Bloomberg’s ‘health care price capping’ and ‘cost control’ initiatives would make ACA compliant plans more affordable and increase the uptake of private health insurance. Currently, approximately 28 million Americans do not have health insurance and a further 41 million are thought to be under-insured.

Some counties do not have full (or any) health insurance coverage.  Mike Bloomberg’s stand on ACA would remove this injustice by bringing PHI to the market place.

Widen the range of services

Approximately 30% of US citizens do not visit their dentist regularly, nor do they seek preventative care for hearing and vision.  Bloomberg intends to include these as Medicare options and for all states to include oral health services for all adults in the ‘Medicaid’ program.

Reduce/control prices and charges

It is generally agreed that the cost of providing healthcare in the USA is too high (nearly 2x that of other developed countries).  The evidence suggests that in many areas (for instance, life expectancy and infant mortality) the outcomes are worse than in other advanced nations.

Extending coverage and widening the range of services are not, in themselves, going to reduce the cost of treatment and care. They should, of course, improve overall outcomes, e.g. life expectancy and infant mortality.

Bloomberg’s approach is to ‘cap’ individual’s premiums to 8.5% of household income.  This may be good news to us as individuals but will make additional demands on federal taxes.

He proposes various other caps. For example, on out-of-network charges and most significantly, on the price of medications including prescription drugs.  Bloomberg’s affordable healthcare plan would restrict US drug prices to 120% of the average price charged in other advanced nations. To illustrate the problem, some prescription drugs are available in Canada for approximately 30% of the cost of the same drug in the USA.  This may be good news for the US citizen with a chronic need but could have a huge revenue/profit impact on major US pharmaceutical companies.

The main influence on our choice of drugs is the pharmacist who fills our prescription.  Bloomberg proposes to ban payments to pharmacists by drug companies seeking to obtain preferential treatment.  No one should be incentivized to persuade us to buy a branded drug when the generic alternative is just as effective.

As we describe, Bloomberg offers a range of ideas to promote competition and efficiency while maintaining the ethical standards of Medicare, Medicaid and the ACA. 

One further idea is to create a permanent reinsurance program.  This is common practice in most areas of insurance.  It encourages insurers to insure themselves, i.e. spread their risk of having to meet extreme claims. This would enable them to reduce premiums to their clients: Bloomberg claims by 10%.

Bloomberg vs Trump

No one seriously argues that the US health care system is either more efficient or more effective in terms of outcomes than health care systems in other advanced countries.

Efficiency

• The US spends 17-18% of its GDP on health care while the average developed country spend is 8-9%.

Effectiveness

• Access to care, the US score lower than other developed countries on the following measures: –
  • Practicing doctors -19% per person
  • Practicing nurses -25% ~
  • Acute beds -26% ~

Coverage

• In the US 10% of all Americans have no Health Insurance coverage compared with 99-100% coverage in the ten other countries in a recent JAMA study.

Donald Trump takes a laissez faire approach, reckoning that market forces will eventually determine a health care system where demand is met at an affordable price without the intervention of the federal government and minimal involvement of individual states.

The single payer system proposed by Sanders is entirely at odds with Republican ideology and is indeed not widely endorsed by his own party.  It would involve the complete dismemberment of existing structures.

In broad terms we devote some $3.5 trillion on the US health care system ($ spent either directly by us as individuals or indirectly through federal and state taxes). About 16 million people are employed within the system and millions more in supporting industries, such as pharmaceuticals and insurance. 

Bloomberg’s proposals deserve consideration for their recognition of the multi-dimensional nature of the problems health care faces and the need to build on existing structures for the benefit of the whole nation.