Health Law & Policy
| May 02 2019

‘Medicare-for-All’ gets hearing on Capitol Hill

Geoff Manville
Partner, Mercer’s Law & Policy Group

Congress’ first-ever “Medicare for All” hearing this week highlighted that for all the legislation’s incredibly high political hurdles, actually implementing a single-payer law would be even harder.

A panel of health care experts testified April 30 before the House Rules Committee and answered questions on the legislation (HR 1384), which is similar to a bill championed by Sen. Bernie Sanders, I-VT (S 1129). Both measures would transition the US healthcare system to a single-payer plan, largely ending employer-provided coverage and restructuring virtually every sector of the health care industry.

Despite deep divisions within the party (not to mention fierce opposition from Republicans and much of the industry), committee Democrats presented a largely unified front in making the case for a single-payer system. And while the hearing was unusually substantive and dug into key aspects of the legislation, it also underscored the difficulty of assessing the potential impact without key details.

One of the biggest unanswered questions is how much a single-payer system would cost. The current bills don’t include financing plans, although Sanders has released a list of possible ways to pay for his that include substantial tax hikes for individuals and businesses as well as a 7.5 percent income-based premium tax on employers. Republicans on the panel raised alarm about unofficial estimates of Medicare-for-All costs that range from $32 trillion to nearly $40 trillion over ten years. Progressive Democrats countered that that price tag could be less than what the US is projected to spend on health care under the current system.

The ultimate price tag depends in large part on the thorny issue of how to pay doctors and other providers under a single-payer system. Currently, providers earn significantly higher revenue from reimbursements from private insurers, while Medicare and Medicaid reimburse them at lower rates. Republicans and some witnesses raised concerns that lower payments could close many, especially rural, hospitals.

Advocates have proposed different types of plans, such as paying all providers based on current Medicare rates or global budgeting, through which institutions would regularly receive a lump sum of money as reimbursement for treatments. The only agreement on this point was that selecting the “wrong” payment scheme could have serious ramifications.

On May 1 the non-partisan Congressional Budget Office (CBO) released a paper titled “Key Design Components and Considerations for Establishing a Single-Payer Health Care System” which laid out the components that would have to be considered in moving to a single-payer approach. Democrats requesting the analysis expressly asked CBO not to score the cost of Medicare-for-All legislation, though Republicans will probably continue to push CBO for a score. The new CBO analysis offers commentary on the implications of major options and trade-offs lawmakers designing a single-payer system would need to consider.

With enactment of Medicare-for-All virtually impossible with Republicans in control of the Senate and White House, many of the details and larger policy debates are still to come. But the CBO report and future hearings – the House Ways and Means Committee is planning one – may provide a look at what it would take to shift the nation to a single-payer system.

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