Medicare-for-All Gets First Formal Hearing on Capitol Hill

Kerry Dooley Young

May 01, 2019

WASHINGTON — Lawmakers in the US House of Representatives on Tuesday for the first time formally debated potential benefits and drawbacks of expanding Medicare to serve more Americans, an idea that likely will continue to attract attention ahead of the 2020 election.

The House Rules Committee held the first congressional hearing about a Medicare-for-all plan, as outlined in a bill written by Rep. Pramila Jayapal (D-WA) and more than 107 of her fellow House Democrats.

Medicare already provides coverage for nearly 1 in 5 people living in America. As of last year, more than 51 million people aged 65 or older were enrolled in the giant federal healthcare plan. Another 8.8 million people were covered by Medicare because of disabilities.

Democratic presidential contenders have backed different models for enlarging the program, with Sen. Bernie Sanders (I-VT) allying with Jayapal in efforts to make what would perhaps be the most sweeping change. Jayapal's bill is intended to move the United States toward a single-payer model, which the legislation's sponsors say would produce savings by reducing administrative costs.

Other Democratic bills call for expanding Medicare and Medicaid or creating a new public plan to compete with private insurers.

Rep. Jamie Raskin (D-MD) called Tuesday's House Rules Committee hearing a "breakthrough in the national dialogue about healthcare."

Like many of his colleagues, Raskin emphasized a need to reshape the American healthcare system so that people are not forced to skimp or even miss out on needed medical treatment. Raskin spoke at the hearing about his own experience in being diagnosed with stage III colon cancer while he was serving in the Maryland state legislature. He had insurance, but his illness made him more concerned about those who cannot afford treatment for serious illnesses.

"It opened my eyes to the fact that this is a crisis in our country," Raskin said. "There are tens of millions of people who don't know what they would do in the event that they came down with a diagnosis like that."

Current System "Absurd"

The committee hearing featured testimony from Ady Barkan, a 35-year-old California man suffering from amyotrophic lateral sclerosis. The disease has progressed to the point of robbing him of speech. He used a device that had an automated voice to tell the lawmakers about his family's struggle to cover the costs of his illness.

Although Barkan has what he described as "comparatively good private health insurance," he now needs intense assistance that costs about $9000 a month. Barkan, who is married and has a toddler, said he is trying to avoid having to move to a nursing home.

"So we are cobbling together the money from friends and family and supporters all over the country," Barkan said. He called this "an absurd way" to fund healthcare in an affluent nation.

"GoFundMe is a terrible substitute for smart congressional action," Barkan said.

Another witness, Farzon Nahvi, MD, an emergency medicine physician from New York, told the committee stories about his patients who suffer because of a lack of funds for medical care.

One young patient overdosed on antibiotics that were intended to be used for aquarium fish, Navi said. The patient had a fever and could not afford a visit to a doctor, so she went to a pet store and bought the antibiotics. The directions for these antibiotics called for the antibiotics to be dropped into a fish tank. The patient developed complications that affected her brain.

"She ended up falling down a staircase while on a job interview and needed to be admitted to the ICU," Navi told the Rules Committee.

He also said that when his fiance was 10 years old, she lost her mother because of a lack of medical care. His fiance's mother had delayed seeking treatment for abdominal pain, which allowed stomach cancer to spread.

"A housekeeper raising two daughters, my fiance's mother was worried about the cost of her care, and she paid for it with her life," Navi said.

"I'm here today because my patients and my fiance deserve better," he added. "These stories and countless others are absolutely ridiculous to be taking place here in the richest country in the world."

Navi urged lawmakers to ask physicians and nurses about how often in their experience patients leave hospitals against medical orders because they cannot pay for treatments.

"The reality for many people in this country is that seeking medical care means weighing their health against their wallet," Navi said.

Services at Risk?

In contrast, a witness called by the Republicans on the House Rules Committee argued that a switch to Medicare-for-all would slash pay in the medical community and put services at risk.

Grace-Marie Turner, president of the nonprofit Galen Institute, said this could push the finances of physician practices into the red and lead hospitals to close or cut back on services.

"If current Medicare rates are applied, assigning Medicare rates to hospitals would entail payment rates that are roughly 40% lower than commercial rates, while physicians would see 30% cuts," Turner said. "These payment reductions would gradually grow larger over time for both."

Lobbying groups for insurers and drugmakers have opposed legislation that involves major changes to Medicare, including proposals that seek to have the program directly negotiate drug prices.

But the concept of Medicare-for-all does have staunch supporters. National Nurses United, for example, has held many events in support of Jayapal's bill.

On Wednesday, the Congressional Budget Office (CBO) will release a report on the potential costs of expanding government insurance coverage for people who are not old enough to qualify for Medicare. The report is CBO's response from House Budget Chairman John Yarmuth, who in January requested a broad assessment regarding the expansion of federal medical coverage.

"The report would not necessarily provide CBO's estimate of the effects of any particular proposal for a single-payer system on federal spending or national health care spending but would, to the extent feasible, provide a qualitative assessment of how the choices with respect to major design issues would affect such spending," Yarmuth wrote in his January letter to CBO.

Without a CBO assessment of a specific proposal, witnesses at the Rules Committee hearing could offer only educated guesses about the potential cost of a major Medicare expansion.

Dean Baker, senior economist for the left-leaning Center for Economic and Policy Research, said there may be significant administrative savings from a simplified approach to reimbursement. Published research indicates that hospitals in the United States devote 24.3% of spending to administrative costs; in comparison, Canadian hospitals spend 12.9%, said Baker, whose testimony supported Democratic views.

But Baker also argued for a need to reduce costs for treatments in the United States.

"Just as we pay roughly twice as much per person for our healthcare as people in other wealthy countries, we also pay twice as much for most of our inputs, such as prescription drugs, medical equipment, and physicians' services," he said.

"By bringing these costs in line with costs in other wealthy countries, we can substantially reduce healthcare spending and the amount of additional revenue that would be needed to cover a universal Medicare program," Baker said.

"Socialist Proposal"

Charles Blahous, a former member of the Medicare board of trustees, supported GOP objections to expanding the federal program. Blahous, now a researcher at the Mercatus Center at George Mason University, Fairfax, Virginia, presented estimates of a 2017 version of a Medicare-for-all bill. He pegged additional potential costs in the range of $32.6 trillion to $38.8 trillion over a decade.

He told the Rules Committee that people may be more likely to use health services under a Medicare-for-all system, which would drive up some costs, even as the new system would cut payments for services.

"It is likely that there would be some disruptions in the availability, timeliness, and quality of healthcare services, but no one can say what they would be," Blahous said.

At the Rules Committee hearing, Rep. Tom Cole of Oklahoma, the committee's ranking Republican, summarized many of the GOP criticisms of the Medicare-for-all approach in his opening statement.

Such a change would put at risk the insurer-run Medicare Advantage plans, Cole said. These plans are popular with some beneficiaries because they provide benefits that traditional fee-for-service Medicare does not, such as dental care.

Cole described Medicare-for-all as a "socialist proposal that threatens freedom and choice and would allow Washington to impose a one-size-fits-all plan on the American people.

"Private health insurance would be completely banned. Everyone — every man, woman, and child in America with private, employer-based, or union-based health insurance — would lose their plan," Cole said in his statement.

At the close of the hearing, Cole stressed that he saw a chance for bipartisan work on other proposals meant to rein in rising medical costs.

"Count me as skeptical that a new one-size-fits-all system will achieve the objectives that its advocates have laid out with such optimism and such hope," Cole said about the Medicare-for-all plan.

He suggested that lawmakers instead "focus on small steps that we know can become law, that we know can actually happen."

Unusual Venue

Both the House Ways and Means Committee and the Energy and Commerce Committee have been busily working on a number of smaller policy changes intended to attack different aspects of healthcare costs. The Energy and Commerce Committee on Tuesday held a hearing regarding proposals meant to restrain growth in Medicare's spending on pharmaceuticals. These included ideas developed by the influential Medicare Payment Advisory Commission for creating an out-of-pocket limit to the Part D pharmacy program.

On the Ways and Means Committee, Chairman Richard E. Neal (D-MA), working with Republicans, has sponsored healthcare bills that seek to make more incremental changes to restrain medical costs. His Prescription Drug STAR Act, sponsored with Rep. Kevin Brady of Texas, the ranking Republican on the Ways and Means Committee, would require drug manufacturers to publicly justify large price increases for older medicines and high initial prices for new products.

Several House Republicans criticized Democrats for having the Rules Committee kick off legislative work on potential Medicare-for-all legislation, claiming it was an unusual venue for an in-depth hearing on health policy. The committee usually functions as an arm of party leadership in the House. It sets the conditions on the terms for debate when the chamber votes on bills, including limits on amendments.

Democrats responded by noting that Republicans did not hold hearings at all on certain efforts to repeal the Affordable Care Act (ACA) of 2010. In the last session of Congress (2017–2019), Republicans proposed major changes in both Medicaid and federal subsidies for insurance without allowing Democrats much of a chance for formal input.

During the Rules Comittee hearing, Democrats noted that Neal intends to hold a Ways and Means Committee hearing on potential Medicare expansion. A spokeswoman for Neal confirmed this plan for Medscape Medical News, saying that a date had not yet been set.

A Ways and Means hearing would give added clout to a debate on Medicare expansion, because the committee has both jurisdiction for the program and deep expertise about it.

Rules Committee Chairman James P. McGovern (D-MA) is among the more liberal members of the House. He's a sponsor of Jayapal's Medicare-for-all bill. As of Tuesday evening, Neal was not listed among the supporters for the Medicare-for-all bill.

A Ways and Means Committee hearing thus might serve as a stage for the consideration of plans to broaden Medicare, but it would do so to a lesser degree than Jayapal and Sanders are seeking.

"A Pipe Dream"

There's little chance of major changes being made to Medicare before the 2020 election, and the odds will remain steeply against widespread expansion of the program even if Democrats do well in that year's contests, predicted a former administrator of the Centers for Medicare & Medicaid Services (CMS) last week.

Thomas A. Scully, who led the CMS during the administration of President George W. Bush, was among the speakers at an April 25 Alliance for Health Policy briefing on Medicare proposals. Noted in Washington policy circles for his candor, Scully outlined challenges to a Medicare-for-all proposal during his comments at the briefing. He then expanded on these comment in an interview with Medscape Medical News.

Scully recalled how Democrats struggled under President Barack Obama to overcome their own internal divisions about healthcare policy. It took months for them to develop the ACA, even when Democrats briefly had a majority in both the House and Senate. In theory, this should have cleared a legislative path for them.

Similar divisions would likely arise again if Democrats were to win control of the White House and the Senate while keeping a House majority in the 2020 contests, Scully said.

"It would be very difficult to pass something big," such as a broad expansion of Medicare's fee-for-service program, as envisioned by some Democrats, Scully said.

He does see a possibility for a limited expansion of Medicare. He mentioned a variation of a proposal that 2016 Democratic presidential candidate Hillary Clinton had backed, although he did not refer to Clinton in the interview. Clinton had floated the idea of allowing people aged 55 and older to buy into Medicare. Scully offered the same idea, but with the twist that the new participants could only be enrolled in the insurer-run form of the giant healthcare program.

"The most likely thing to happen would be to say — let's say, take Medicare Advantage, and for people between 55 and 65, we'll give them the opportunity to buy into those local plans at some subsidized rate, based on their age and income," Scully said regarding potential changes that a Democratic Congress and president may make in the near term.

Scully said he expects the Medicare-for-all proposal to dominate in Democratic presidential debates. Democratic candidates will need to back overhauls of Medicare to prove their liberal credentials, just as for many years, Republicans had to call for an end to the ACA to win over conservatives, he said.

"Medicare for all is a pipe dream, but it's great politics if you are Bernie Sanders. It's like with Republicans," Scully said, "It was great politics to say, 'Repeal the ACA,' when you have no idea what the hell else you want."

The intense debate about Medicare is a good sign for Washington policy, Scully said.

"We're now 10 years beyond the ACA. We're getting back to discussion about how to fix the system. The system needs a lot of fixes, but I don't think they are going to get Medicare for all," he said.

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