Top Healthcare Options for 2020 Candidates

Ken Terry

November 19, 2018

Should the United States go to a Medicare-for-all system, or should the federal government give block grants to the states and let them experiment with Medicaid? Should a public option be included in the Affordable Care Act (ACA) marketplaces? Will the Democrats, who are taking control of the House, cooperate with Republicans on a measure to lower drug prices?

These were some of the questions addressed in a lively Health Affairs forum at the National Press Club in Washington, DC, on November 16. Chaired by Alan Weil, editor-in-chief of Health Affairs, the forum was loosely structured around two articles recently published in the health policy journal.

David Blumenthal, president of the Commonwealth Fund, the think tank that sponsored the articles, described them as a first pass at helping presidential nominees of both parties pick health policy positions for their 2020 campaigns. Underlining the importance of what was the top issue in the recent midterm elections, Blumenthal said, "Healthcare is as fraught as any policy issue a president can address. It can make or break a presidency."

Sherry Glied, PhD, dean of the Robert F. Wagner Graduate School of Public Service at New York University, New York City, summarized the article about democratic policy choices that she cowrote with Jeanne Lambrew, PhD, a senior fellow at the Century Foundation. Noting that democratic presidential candidates are likely to propose some kind of public health plan to address problems regarding cost and access, Glied outlined three alternatives that she viewed as central to the progressive debate:

  • Increase the public elements in private health plans. This might involve enhanced regulation of private insurers, such as limits on private insurers' profits, rate increases and, cost-sharing practices.

  • Give consumers a choice of public and private plans. For example, Congress could vote to include a "public option" in the ACA marketplaces or could allow people aged 55 to 64 years to buy into Medicare.

  • Institute Medicare-for-all. Although recent single-payer proposals vary significantly, all of them would consolidate the financing and administration of most of the US healthcare system into a single plan operated by the federal government. Such a system would give the government control of most provider payments, not just reimbursement for treating Medicare and Medicaid patients.

Medicare-for-all could lead to lower healthcare spending, Glied pointed out, but it would also result in very large tax increases, which would be hard to enact in any political environment. Universal coverage would be ensured, but more than 175 million privately insured people would likely have to change their insurance. Glied recalled the huge political backlash that ensued when the ACA required a few million people who were individually insured to switch plans.

The public plan option would be easier to achieve, she said, but would also face challenges, such as the possibility that a lower-priced public plan on the marketplaces could drive out private insurers. It might be more palatable to offer a public option only to people within a certain age range or in certain geographical areas, she said. But that would be "weak tea" for liberals and would still be attacked fiercely from the right. Perhaps the best way to go, she said, would be to conduct a small-scale pilot of the public-option approach.

State Innovation Approach

The other Health Affairs article was written by Lanhee J. Chen, PhD, director of domestic policy studies and a lecturer in the Public Policy Program at Stanford University, California. Summarizing his study at the conference, Chen explained Republican options for improving on the "state innovation approach" put forward in the Graham/Cassidy/Heller/Johnson bill of 2017.

In this model, the federal government would give Medicaid block grants to states while requiring them to use innovative approaches to expand coverage. For example, they might have to use the block grants to lower premiums or subsidize lower-income people, he said. The Trump administration favors the state innovation approach, which is baked into Trump's fiscal year 2017 budget proposal, Chen added.

The Congressional Budget Office (CBO) has predicted that a block grant approach would reduce the number of people covered by Medicaid, Weil noted. Even if states tried innovative approaches, there would be no way for the CBO to score them. So how would Republicans deal with the public backlash to kicking millions of people off of Medicaid?

Chen admitted that the CBO had predicted a coverage loss with block grants. Nevertheless, he maintained, the terms of the debate have changed since Congress repealed the individual mandate in the ACA as part of the Republicans' tax cutting bill last December. With the advent of more federal flexibility on Medicaid funding, argued Rodney L. Whitlock, PhD, vice president, Health Policy for ML Strategies, the CBO will look at the economics in a different light.

But some members of the panel were having none of it. Adaeze Enekwechi, PhD, vice president of McDermott + Consulting and a former official in the White House Office of Management and Budget, said block grants would reduce funding for Medicaid and that as a result, many people would lose coverage — regardless of state innovations. Moreover, she said, no state governor or health department leader wants to lose Medicaid dollars.

Governors' number one concern about Medicaid is rising costs, noted Josh Archambault, MPP, a senior fellow at the Foundation for Government Accountability and a former advisor to Mitt Romney and Scott Brown. As those costs grow, he argued, they will squeeze out other priorities, such as education. But Glied said that wasn't true for the costs of Medicaid expansion, 90% of which are covered by Washington. "There's no crowd-out," she said.

The only thing that the forum participants agreed on is that Congress will probably not achieve much on healthcare in the next 2 years. Possibly, some said, the two parties can agree on a plan to lower drug costs. But as Chen pointed out, there's no incentive for bipartisanship on either side right now.

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