Destroying Medicare to Save ObamaCare: Hillary Clinton’s “Public Option” Plan

By Lambert Strether of Corrente.

“The narrative” is that Sanders is pulling Clinton left, and one example is Clinton coming out in favor of a “public option” for Medicare. Unfortunately for the narrators, Clinton’s proposal is insultingly unserious, the “public option” has always been a defense against single payer rather than a step towards it, the Democrat nomenklatura remains as implacably opposed to single payer as it has ever been, and, most important of all, the “public option” — as a neo-liberal, market-based solution — could have a significant negative impact on Medicare. In other words, Clinton’s attempt to save ObamaCare politically by supporting a “public option” is — to mix metaphors terribly — a poisoned chalice for the health care system, and not an olive branch to the left. Let’s get the narrative out of the way first, and then treat the rest of these topics in order

“The Narrative” on Clinton’s “Public Option” Proposal

Unsurprisingly, the Times headline tells the story as the Democrat Establishment would like it to be told. In re-emphasizing her support for the public option:

Hillary Clinton Takes a Step to the Left on Health Care

Pete Petersen’s Fiscal Times agrees:

Clinton made those comments after coming under mounting pressure on health care reform not only from Sanders, her long-shot rival for the Democratic nomination, but also from some Democratic members of Congress, rank and file Democrats and health care professionals who say she should be more open to changes to address major shortcomings in Obamacare

Bloomberg had broken the story earlier:

At a campaign stop Monday in Northern Virginia, Hillary Clinton reiterated her support for a government-run health plan in the insurance market, possibly by letting let Americans buy into Medicare, to stem the rise of health-care costs.

(Note the fundamentally neoliberal mindset: The state is, as it were, (1) inside the market, instead of (2) the market being inside the state. But if you want “the rule of law,” for example in contract enforcement, you should choose Door #2. Otherwise, the rule of law is for sale, which is more or less what we see in today’s orgy of corruption and looting, supported by official Washington on a thoroughly bipartisan basis.) Bloomberg continues:

“I’m also in favor of what’s called the public option, so that people can buy into Medicare at a certain age,” the Democratic presidential front-runner said during a roundtable with local residents at the Mug’N Muffin coffee shop. “Which will take a lot of pressure off the costs.”

Wow. When Clinton said she wasn’t a “natural polititican,” she wasn’t kidding, was she? Heaven forfend that we should have an inclusive health care system that seeks to alleviate suffering “for all.” No, “the costs” is the issue Clinton latches onto. (Of course, if you think “cost” is a good faith reason to support neo-liberal solutions like ObamaCare, you have to deny the existence of a “Medicare for All” system that treats everyone, with equal or better outcomes, at much lower cost, say sixty miles north of Burlington, Vermont.)

For good measure, Bloomberg does some Pravda-like rewriting of history:

The idea of a government-run insurance option long has been favored by the liberal wing of the Democratic Party, but it was stripped from the final version of Obamacare legislation in the face of firm opposition by Republicans and the insurance industry.

No, and note the lack of agency in “was stripped.” In fact, Obama cut a secret deal with Big Pharma to strip the “public option”, such as it was, although career “progressives” continued to advocate for the policy long afterwards, because Obama considered them useful idiots (“f*cking retarded”) who didn’t need to be in the loop. One charitably assumes.

So much for the narrative, which is disinformative in every way. To see how, let’s turn first to the public option proposal through which Clinton proposes to save ObamaCare politically, at least for this campaign season. Since Clinton is famously wonky, and access to health care is a life and death issue to many citizens, you’d think she would have worked out every policy detail, right? Wrong.

Clinton’s Proposal Is Insultingly Unserious

“The narrative” on Clinton’s wonkiness is summed up well in this headline from WaPo:

Clinton’s wonky policies of fine-grained complexity contrast with rivals’ grandiose ideas

(How true. It is known that grandiosity is central to the Canadian identity.) And WaPo expands:

To her, complexity is realism.

Clinton says she simply can’t make the simple, grand promises of her rivals — free college tuition, a big, beautiful, free wall. Instead, she skips ahead to what policy looks like the way it’s actually been done: complicated, ugly and in small steps… Clinton treats policymaking like watchmaking — a lot of whirring, tiny, hidden gears

Naturally, I began by looking eagerly for those tiny little gears at the Clinton campaign website in the health care section. If you want to give them the hits, you’ll see that the public option is completely undefined (not surprisingly, to those who know the history, which we’ll get to). So we’ll have to rely on news reports. We’ll see that Clinton’s “plan” for the “public option” ignores the following key implementation issues: (1) The platform; (2) the age cut-off; (3) the income cut-off; (4) subsidies; and (5) coverage. We’ll also see (6) that the “public option” is another tax on time, increasing complexity without necessarily adding value.

(1) The platform. Bloomberg:

While Clinton long has supported including a public option in the insurance market, her campaign said she was floating the idea of letting Americans not yet of retirement age buy into the Medicare system as one way of accomplishing that. She’s also open to creating a separate government-run option on the Obamacare exchanges.

“Open to” is a nice way of saying “hasn’t decided whether” (assuming good faith) or “is concealing the decision to” (being more realistic). If you’ve invested hours of your time fighting through an ObamaCare exchange — as Clinton’s base constituency of credentialed professionals generally does not — this matters to you.

(2) The age cut-off. Fortune:

While she didn’t specify what the age cutoff might be, the implication was that the expansion would be available for those who are at least 50 or 55 years old.

Ah. “The implication.” The actual age is important, since Medicaid estate recovery (see below) kicks in at 55.

(3) The income cut-off. Bloomberg:

She was responding to a question from a resident who complained that she’s just above the cutoff level to enjoy subsidies on the Obamacare exchanges.

“There’s just a cutoff, instead of what I’d like to see which is a kind of gradual diminishment. People shouldn’t just—once they get to a certain income level shouldn’t lose all their benefits,” Clinton said. “That’s something I’m looking at.”

Lots of little cut-offs are still cut-offs, and will present the same ethical dilemmas that the current system does: That is, people on the bubble are incentivized to lie, depending on which side of the cut-off they want to end up on, as are their advisors, if any.

(4) Subsidies. The Times:

Mrs. Clinton did not say, for example, whether lower-income Americans choosing Medicare [through the buy-in] would receive help paying their premiums, as they do when they buy private plans on the new marketplaces in the Affordable Care Act. Without such subsidies, Medicare might be an affordable option only for wealthy or very sick customers.

(It’s not clear to me why being “very sick” makes Medicare more “affordable.” Did I not get the memo?)

(5) Coverage. Don McCann from PNHP:

[W]ithout additional coverage such as [neo-liberal infestations like] Medigap plans, the traditional Medicare program leaves individuals potentially exposed to significant costs. It does not even have a catastrophic cap on coverage. Would an individual opting for a Medicare buy-in need to also purchase a Medigap plan? Or would a special Medicare plan be offered that included those benefits?

(6) Tax on time. Avalere Consulting once more:

While Medicare is widely popular among Americans, Avalere experts say it is not immediately evident that Medicare coverage would be a better option for all people over 50 [assuming that to be the cut-off]. Specifically, when compared to products sold through insurance exchanges, the analysts note that traditional, fee-for-service Medicare tends to offer a broader network of providers and lower deductibles relative to unsubsidized exchange products. However, because of the unusual structure of the Medicare fee-for-service program, consumers enrolling in the program may have higher costs and more benefit limits than exchange products.

So, the “public option” is yet another tax on time, that won’t necessarily yield a benefit if consumers citizens trapped in the maze of options make a wrong choice.

What a mess. I don’t know what they’re doing in Brooklyn besides a Bataan death march, but there’s a simple and obvious policy change — one of those tiny little gears — that would greatly appeal to the citizens at the Mug’N Muffin: Eliminating Medicaid estate recovery, whereby over-55 people forced into Medicaid by ObamaCare’s eligibility rules have any costs incurred clawed back from their estates. Since the only real asset most people may have is their homes, that means sick elders might not be able to pass their homes down to the kids. Fixing that injustice would be one of those incremental changes Clinton is supposed be so enthusiastic about. Since Clinton doesn’t bring up something so obvious, the only conclusion I can draw is that the Democrats just don’t give a future coprolith.

In short, Clinton’s “public option” is mere handwaving. This is unsurprising to those who know the history of the “public option,” to which we now turn.

The True Role of the “Public Option”

To understand how the “public option” — I hope I’ve put shudder quotes round the phrase throughout — functioned to suck all the oxygen away from single payer in 2009-2010’s health care battle, see this post and this post from PHNP; please read both in their entirety. Because that history is not the main point of this post, I’ll quote the bottom line:

Bait and switch: How the “public option” was sold

The people who brought us the “public option” began their campaign promising one thing but now promote something entirely different. To make matters worse, they have not told the public they have backpedalled. The campaign for the “public option” resembles the classic bait-and-switch scam: tell your customers you’ve got one thing for sale when in fact you’re selling something very different.

When the “public option” campaign began, its leaders promoted a huge “Medicare-like” program that would enroll about 130 million people. Such a program would dwarf even Medicare, which, with its 45 million enrollees, is the nation’s largest health insurer, public or private. But today “public option” advocates sing the praises of tiny “public options” contained in congressional legislation sponsored by leading Democrats that bear no resemblance to the original model.

According to the Congressional Budget Office, the “public options” described in the Democrats’ legislation might enroll 10 million people and will have virtually no effect on health care costs, which means the “public options” cannot, by themselves, have any effect on the number of uninsured. But the leaders of the “public option” movement haven’t told the public they have abandoned their original vision. It’s high time they did.

Today’s Clintonian “public option” is, of course, the “tiny” version. Don McCann summarizes today’s bait and switch:

Medicare buy-in or public option is not a step towards single payer. It would be merely another player in our dysfunctional system. Worse, it would further postpone enactment of the reform that we really need merely because we would be thinking that we’ve done something when we really haven’t.

The Democrat Nomenklatura Remains “Incremental”

To see that the (miserably inadequate) “tiny” “public option” is the maximum that consumers citizens can expect from the Democrat establishment, listen to the staffers. Morning Consult:

“Yes, premiums are going to be higher, and that is something that is not good for anyone. But we’re not comparing apples to apples here. We’re comparing to a world pre-ACA,” said a Senate Democratic aide, one of several interviewed about premiums.

I love the blithe dismissal of “higher premiums.” I don’t know what this aide’s life is like, but when I take money out of the coffee can on the kitchen table to pay for stuff, I care about how much money I have to take out of the coffee can that day, and not any coulda, woulda, shoulda about “a world” in some historical romance or science fiction future. What’s wrong with these people?

The aides say Democrats are aware affordability needs to be discussed going forward. But the political environment around Obamacare in the last few years (i.e., repeal or nothing) has meant the law hasn’t been substantially amended since it was passed.

Mean Republicans were so brutal they prevented Democrats from even proposing anything!

“What we all have come to know now is the uninsured rate is the lowest it’s ever been before,” one aide said. “Proposing that there are still interesting or fundamental things that can be changed within our current reality is appropriate.”

“What we have come to know.”[1] “Our current reality.” “Appropriate.” Have you ever heard more arrogant or entitled language? Especially the tone-policing “appropriate”? We think of the bubble these people live in as huuuge, but in fact it doesn’t even include Canada; the pointy end of Newfoundland would pop it.

“The bottom line for us is we set the bar here,” another aide chimed in. “Clearly there’s an array of things to be done on affordability … but we can’t just go back in time and start anew.”

Whaddaya mean, “we”? And another Democrat aide, this one willing to go on the record:

“The Republican party is imploding,” said Jim Manley, a former aide to Democratic Leader Harry Reid (D-Nev.), in an email. “They will try to make hay out of the increases. But they don’t have an alternative and their presidential nominee is politically radioactive so Democrats should just hang tight.”

In other words, if Donald Trump did not exist, the Democrat Party would have to invent him. Keep that Big Pharma and health insurance money coming in! Ka-ching….

The “Public Option” Will Damage Medicare

Finally, we come to the most important issue of all: Clinton’s “public option” — while preventing Medicare for All, as it is designed to do — will damage Medicare. PNHP explains:

The “public plan option” won’t work to fix the health care system for two reasons.

1. It forgoes at least 84 percent of the administrative savings available through single payer. The public plan option would do nothing to streamline the administrative tasks (and costs) of hospitals, physicians offices, and nursing homes, which would still contend with multiple payers, and hence still need the complex cost tracking and billing apparatus that drives administrative costs. These unnecessary provider administrative costs account for the vast majority of bureaucratic waste. Hence, even if 95 percent of Americans who are currently privately insured were to join the public plan (and it had overhead costs at current Medicare levels), the savings on insurance overhead would amount to only 16 percent of the roughly $400 billion annually achievable through single payer — not enough to make reform affordable.

2. A quarter century of experience with public/private competition in the Medicare program demonstrates that the private plans will not allow a level playing field. Despite strict regulation, private insurers have successfully cherry picked healthier seniors, and have exploited regional health spending differences to their advantage. They have progressively undermined the public plan — which started as the single payer for seniors and has now become a funding mechanism for HMOs — and a place to dump the unprofitably ill. A public plan option does not lead toward single payer, but toward the segregation of patients, with profitable ones in private plans and unprofitable ones in the public plan.

Hmm. So the unprofitable patients will be dumped into Medicare? Sounds like a recipe for a Medicare death spiral, to me. And that’s not a bug. It’s a feature.

Conclusion

In summary, Clinton’s attempt to save ObamaCare politically by adding on the “public option” is a bait and switch operation designed to eliminate the threat of Medicare for All. It worked that way in 2009, and Clinton’s pulling the same play out of the Democrat playbook for 2016. In, fact Clinton’s “public option,” despite her wonky reputation, is so skimpy on detail is to be insultingly unserious, exactly like the “public option” in 2009. The Democratic Establishment remains implacably opposed to Medicare for All, and if by some miracle they manage to pass the “public option,” that will undermine the existing Medicare program, which is no doubt their goal. On the life-and-death issue of providing health care to all Americans, there is more that divides us than unites us.

NOTES

[1] What these people have “come to know” does not include the idea that health insurance is not the same as health care. What planet are they from?

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.

65 comments

        1. Oak

          We will all understand this situation a lot better if we read this unique PDF by a unique warrior for single payer who exposed this whole shame for what it is and I suspect perhaps paid a very high price for doing so. He suddenly died on August 8, 2009 and his death is still unexplained- read the list messages below for more.

          http://www.pnhp.org/sites/default/files/Nick%20Skala%20GAT%20and%20Health%20Reform.pdf

          This is Nicholas Skala speaking in June 2009, in Washington,

          https://www.youtube.com/watch?v=dWBZz070m-k

          Also-read both

          http://www.pnhpillinois.org/pipermail/activists_healthcareil.org/2009-August/000156.html
          http://www.pnhpillinois.org/pipermail/activists_healthcareil.org/2009-August/000157.html

          also: http://www.policyalternatives.ca/sites/default/files/uploads/publications/National_Office_Pubs/putting_health_first.pdf

          and

          http://www.maine.gov/legis/opla/ctpchlthcaresub.pdf

          thank you!

    1. jgordon

      There is no need. I just read the headline and already knew that it must be true. Clinton: “You can’t have nice things because that’s not serious or adult. Take these moldy crumbs and like them!”

      1. Amateur Socialist

        “… A spokesperson for Ms. Clinton confirmed that she favored the market based Obamacare approach because it preserved important client lobbyist opportunities…”

        (from my imaginary version of this article)

        1. Oak

          We’re locked in by bad trade policy, especially a Bill Clinton-signed 1994 WTO trade deal on services. (“GATS”) as well as a new trio of backroom deals, TPP, TTIP and especially ‘TiSA”. Public healthcare is now being officially framed as a kind of theft – stealing customers from corporations. Its been this way since 1995, they just neglected to tell the country. Now the country is stuck with their lie and the fact that they can’t tell the truth about it because its so horrible.

          1. nat scientist

            Never Forget Clinton Foundation theft:

            http://wallstreetonparade.com/2016/05/a-harvard-mba-guy-is-out-to-bring-down-the-clintons/

            sample:
            In a 2013 New York Times article, “Unease at Clinton Foundation Over Finances and Ambitions,” reporters Nicholas Confessore and Amy Chozick hint that Hillary Clinton’s political operatives are occupying offices at the Clinton Foundation headquarters, writing that they “will work on organizing Mrs. Clinton’s packed schedule of paid speeches to trade groups and awards ceremonies and assist in the research and writing of Mrs. Clinton’s memoir about her time at the State Department, to be published by Simon & Schuster next summer.”

            A June 2015 article in the Wall Street Journal by Kimberley Strassel stopped hinting and spelled it out boldly, calling the Clinton Foundation a “Hillary superPac that throws in the occasional good deed.” Strassel explained:

  1. RW Tucker

    Obamacare could have been two pages for its most popular parts: preexisting conditions and staying on the parent’s plan. When I hear of Obamacare successes, those are the two most cited parts. Instead of two pages, we got several thousand.

    The words I live by when it comes to the sausage making: anything complex or wordy in policy is probably suspect.

    1. jrs

      I hear medicaid expansion as the most useful part (and no it’s not a great system, just better than nothing mostly).

      What is so great about staying on one’s parents plan anyway? With most employer healthcare the parents are paying a decent chunk to have dependents on their plan, it’s almost never free or particularly cheap, and so I can’t really imagine it being a very viable option for everyone with kids that age.

    2. Jim Haygood

      ‘Clinton’s “public option,” despite her wonky reputation, is so skimpy on detail is to be insultingly unserious.’

      It’s a must, to carve out a year of deal-making with “providers” after Hillary is in charge. Same procedure as the non-public meetings of the HillaryCare task force in 1993-4.

      Just naively announcing a clear, simple plan now is not the way you maximize campaign and charitable foundation contributions.

      1. marym

        In addition to privatized Medicare Supplement (Medigap) policies, Medicare itself already includes a “private option” (Medicare Advantage) and separate privatized drug coverage, and pushes Medicaid-eligible people out of Medicare entirely into privatized Medicaid managed care. So, yes at least a year to figure out how to maximize the rent.

        1. Carla

          YES. Obamacare has already crappified Medicare. Now Hillary and her buddy Pete Peterson are poised to kill it entirely.

          We need expanded and improved Medicare for All. EINO (everybody in, nobody out).

          Let me qualify that: everybody allowed in, nobody allowed out, because without the masters of the universe compelled to participate, we’ll wind up with a crap system again.

          OUTLAW private health insurance entirely, along with for-profit hospitals. Regulate the hell out of pharmaceutical and medical equipment manufacturers. Fund all medical research publicly (90-95% of it is anyway, and then the private sector just steals it). Institute free medical education for the specialties most needed first — internal medicine, geriatrics and pediatrics, and phasing in other specialties as appropriate.

        2. Benedict@Large

          I just turned 65, and am in the “middle” of transferring from Medicaid to Medicare, with a pass-thru of several months in a combined Medicaid/Medicare status. Because I’m on chemotherapy and continuity of both doctor and course of treatment is imperative, I am keeping my Humana Managed Care Plan all the way through.

          I started with this transition back in December, and am still in the middle of it. I have no idea when the transition will be complete. I am constantly receiving notices of changes in enrollment, often well after the change is effective. I’ve been mis-billed several times, have been charged co-payments when none are due, have multiple enrollment cards with different info, and other various confusions, and opening my mailbox is always a surprise. I’ve had numerous meetings with marketing and administration people, as well as many dozens of phone calls. While everyone I’ve dealt with seems reasonably competent, no one has been able to do anything but manage the evolution of this transition. And none of this has to do with my actual medical care, which often presents whole new sets of walls.

          People often speak of our healthcare system in the US, but that’s nonsense. This is not a system of any sort, but rather a patchwork of people sticking their hands out to collect their share of the pie, as patients are shuffled on almost mindlessly thru a maze no one can actually describe. I’m fortunate that even with my illness and many treatments, I’m still mostly coherent. I have no idea what happens with people who are not. No doubt, many simply die, as the hands keep coming out for their final shares of their pies. It’s those dollops of cash, after all; the only reason this mess exists.

          1. oh

            Benedict,

            Sorry to hear that you’re undergoing chemo. I wish you a speedy recovery.
            (From one who knows you thru another comment section).

            Best to ya.

  2. flora

    “To her, complexity is realism.”

    Yes, 3-card Monty done correctly is complex.
    Thanks for this post. This is why I read NC.

    1. fresno dan

      “(Note the fundamentally neoliberal mindset: The state is, as it were, (1) inside the market, instead of (2) the market being inside the state. But if you want “the rule of law,” for example in contract enforcement, you should choose Door #2. Otherwise, the rule of law is for sale, which is more or less what we see in today’s orgy of corruption and looting, supported by official Washington on a thoroughly bipartisan basis.)”
      =====================================
      Probably one of the most insightful things I have ever read. Our laws have become so complex for the same reason ever contract you sign is complex – it is designed to screw you while protecting the business, while disguising that simple fact…

  3. crittermom

    I feel physically nauseous to think this woman (& I hate having to put her even in that same class as me) has a chance of becoming president.
    I’m turning 65 soon, living far below standard living conditions now that I must rent for the first time in my adult life after the banksters stole my home, forced to take early retirement since the place I worked near my ‘new home’ closed down & I needed to keep any roof over my head—& her plan includes higher premiums?

    I don’t see Trump doing me any favors, either, if elected, regarding healthcare.
    (But then, with he or HRC in charge, there may not be a populace to worry about healthcare?).

    I’d like to see NC as required reading in high school. It would teach the students to search for any truth behind the words.
    It’s a glimmer of hope to know that Bernie has so many young supporters.

    If Bernie does not win the election (& his supporters have tarred & feathered all those superdelegates who refused to support him), I see my future as only getting worse, which I didn’t think was possible after losing my home under HAMP.

    I must now sign off so I can call my insurance provider under Medicaid to find out why, after speaking with them more than once regarding an upcoming Drs visit, they had failed to tell me that Dr was not in their ‘provider program’, so coverage was denied & I have now been hit with a bill equal to almost half my SS for the month. Swell.

    Followed by a call to the Drs to find out why they failed to mention it when they accepted my insurance card.

    1. aletheia33

      i don’t get this. i thought drs. either “take medicaid patients” or don’t, and you ask them if they will take you the first time you call them up. when i was on medicaid in vt it was that simple. that was before obamacare; it may not be so simple now.

      good for you to keep fighting. refuse to pay and i hope either they will back down or let you pay over an indefinite stretch of time. in case you don’t already know: some hospitals and doctors have programs for low income patients. such programs vary greatly in what they can do to help you. it is worthwhile to get to know that terrain.

      also i’ve found that a social worker/therapist who works with low-income people and really knows the system can clue one in to sources of support one may not otherwise learn about. i found one such person by accident and, no question, she is saving my ass. also i see below someone has mentioned senior citizen centers as good sources of that info.

      thanks for being here and for your contributions to NC, which i find valuable. solidarity! we are far from alone in our difficulties.

  4. Anne

    What is just so glaringly and maddeningly obvious is that the goal is not to improve access to and affordability of care, it is to preserve the stranglehold the insurance industry has on the American people, and to make sure as little as possible gets in the way of the cash pouring out of our pockets and into theirs. So what if, after we pay the premiums and the deductibles and the co-pays there’s nothing left in the coffee can for, you know, actual care?

    I want to scream every time I hear or read that more Americans than ever before have health insurance; to me, that says, “more people than ever before are paying into a [dysfunctional, greed-driven] system with no guarantee of getting anything out of it.”

    So, you can only imagine how I react when I read about Hillary Clinton irresponsibly – but with great cunning and calculation – bandying about words and phrases for the express purpose of okeydoking people to vote for her.

    It isn’t about having insurance, it’s about having access to care we can afford. It’s about recognizing that insurance is more often a barrier to care, not a facilitator. Oh, sure, your insurance card gets you in the door, keeps you from being dumped on the sidewalk, but it doesn’t mean you still can’t go broke if you have a serious medical situation. It still doesn’t mean you don’t have to decide between selling your soul in order to live, or doing nothing and hoping you won’t die after all.

    Sadly, no one’s going to put Clinton’s feet to the fire and make Her Wonkiness explain in detail how her version of a “public option” is going to make anything better. Well, I guess she could just say out loud what we know she’s thinking: it will make her life better if it gets her to the WH, and as near as I can tell, that’s the only thing that matters to her.

  5. Jack Heape

    Good article Lambert. The bottom line, as you so aptly summed up with your comment about the market and where it should be, is that profit and the insurance industry has to be taken out of the dialog. Essentially, everyone is going to have to face the fact that the medical insurance industry will have to cease to exist. And anyone, politician or otherwise, who says that we cannot have an effective single payer system is either a complete ignoramus (because they don’t know anything about health insurance here as compared to the rest of the world) or they are flat out lying. Here is a simple way to make it easy to understand. Believe it or not the medical system in our country that delivers the best outcomes is the VA. Research has proven that time and again. The VA spends about $7500 per patient (their 2015 budget for health care dvided by the number of vets serviced). That per capita number has remained basically unchanged for the last 8 years as far as I can tell. There are 320 million people in the US. Multiply that by 320 million (population of US) and you get $2.4 trillion, which is far less than the $3 trillion we spend now having a lot of people uninsured. I would say that figure would actually be much less because since it includes everyone, all of the people who seldom need health care (i.e. the young) would need far less than $7500 to cover their costs. $7500 by the way is much lower than some countries like Norway, but is greater than Canada and the UK. This is just one scenario. We have systems in place that work. You just have to take the profit and overhead out of it.

    1. Cloo

      It is a bit more complex than that. The VA is more akin to the UK system, where the healthcare providers are directly employed by the system (i.e., more socialized). Medicare is closer to the Canadian system, where the healthcare providers are not employed by the system. Out of control healthcare costs have two components in the US: bloated administrative costs and over-consumption of healthcare. The second is subtle, but it includes things like unnecessary surgeries, unnecessary medical imaging, etc. which increase profits without improvement in health.

      1. Skip Intro

        ‘Overconsumption’ sounds like people are going to the doctor too much, getting too much care. But, as you say, it is really just a corrupt offshoot of the insurance system, where doctors learn to game the insurers’ expectations and paperwork. With no entity with a stake in the long-term health of the individual and a pay-per-service model for healthcare, perverse incentives will keep us caught between doctors and the insurers they battle.

      2. Jack Heape

        I agree that it is more complicated. I was merely trying to put the main argument of the anti-single payer group, costs, in perspective. Of course there will need to be many other reforms, such as pharma regulation and purchasing, legal liability, the AMA restricting the number of medical school slots, etc. I would also disagree that there is an “over consumption” problem. While there are of course some consumers who want to test and see the doctor about everything, most people avoid having to get medical care unless they need it.

  6. Elliot

    Re: the Medicaid clawback; I have a friend who is taking a reverse mortgage to supplement his SS, would/could that somehow end up in him losing that income because it got funneled into a healthcare clawback?

    1. marym

      I don’t know the answer, but in addition to federal law, Medicaid clawback rules can also vary by state.

      1. Grizziz

        Wait a minute. The clawback should have been called a death tax. Then it would’ve never passed the muster of the Congress. Where is Frank Luntz when you need him?

    2. flora

      Clawbacks, as I understand it (I’m not an atty), do not start against the estate until the person dies.
      A more immediate question would be: Does the income from the reverse mortgage raise your friend’s income and assets above the Medicaid cutoff threshold, making him now ineligible for Medicaid?
      Speak to someone in your area who knows ElderLaw and the Medicaid rules in your state.

      Here are the 2016 Medicaid income limits.
      http://kff.org/health-reform/state-indicator/medicaid-income-eligibility-limits-for-adults-as-a-percent-of-the-federal-poverty-level/

      1. flora

        Local Senior Centers are a good source to check for basic information. Senior Centers often have a wealth of information and people who can advise in general terms about govt programs. It’s free.

    3. Lambert Strether Post author

      I think that families who can afford lawyers would put the house in a trust so that it didn’t count against the Medicaid threshold and the kids, if any, get it. How that interacts with the reverse mortgage I don’t know.

      1. jo6pac

        Yes, an open trust and it doesn’t cost much to have a lawyer do this. The Medicaid is only collect by the state upon death of the last spouse and in Calif. it’s like the next day.

        If the house is already in a reverse M I don’t think a trust is the best plan.

        1. Elliot

          Thanks, everyone. I’ll give him this info.

          One thing I do know about putting assets into trust to protect from Medicaid clawback is that that must be done well before getting to the point of needing Medicaid; in this state, that’s minimum 5 years before.

  7. Eric377

    The public option under consideration during the debate over ACA probably would not have had any dramatic impact on the insurance industry. But by having been shown to be not particularly useful, its ho-humness (or even failure) may have set the stage for a more aggressive push of single payer. Public option still would have been expected to have its funding from customer premiums and would have needed just about the same administrative burden to operate. And unlike a commercial insurer it probably would never have been allowed to run at a loss while it got a feel for the market as that loss would immediately be a “bailout”. Beyond that, the public option would have needed to create providers networks and contracts. No way that providers would have simply said “okay we will give you the Medicare deal”. I have spoken to many ardent supporters of public option who believed that just hanging up a shingle saying “Public Option” would have allowed massive cost subsidization like no charge for office space, no burden for employee health care, no need for marketing, near immunity to legal challenges, wink and nod subsidization of health care claims if the underwriting was too generous for customers and the best possible provider terms in the market. My guess is that it could have been a fiasco as devious commercial insurers would have worked like crazy to direct unprofitable customers towards public option.

  8. Elliot

    ..and not that I wish people who get subsidies ill, but why don’t they face a clawback on their medical costs? Why are only the poorest forced to indemnify themselves via forfeiting their home ownership, instead of having insurance like everyone else?

    (Obv true single payer is the best solution, but while we have this healthcrapification, it would seem like they could pretend to be more fair.)

  9. Edward Qubain

    Did Clinton come up with this plan or her advisors? The plan might reflect on her advisors.

    The press will help Clinton perpetuate this fraud.

    1. flora

      Hmmmm…. has Jonathan Gruber signed up to sell Hillary’s plan, like he did with the ACA?

  10. jfleni

    Medicare for all, or nobody, or advantage or whatever: Medicare effing blows! Period.
    Need a wheelchair? OK, happy to serve you. Gimme! A crutch or cane, Same thing.

    Single Payer works in almost all countries, but the insurance mafia and their grovelling politicians WON’T let go of their filthy lucre .. and never will, unless WE
    force them!

    1. jawbone

      Medicare was the best birthday present I ever, ever, EVER received.

      Thank you, LBJ. And, of course, thank you to FDR a well, for that little life saver called Social Security.

      Now, just what do you think the arch Corporatist Dem, Hillary, has in mind for Social Security???

  11. Pat

    Funnily enough watching the free fall that I see in the ACA, I wouldn’t be surprised if they do force this piece of shit idea through to destroy Medicare. Mostly because the opportunity to do that is going to be gone within the the next ten years. I truly and fully expect the insurance company greed AND the fact that even with a minimum wage increase (or perhaps because of it) insurance is going to be so expensive and so useless not even Democrats are going to protect it. And since the dropping off of the exchanges is just getting started there won’t be much to kill. Unfortunately they won’t do anything to replace, particularly not in the manner they should.

    Oh, they will probably keep the Medicaid expansion, it isn’t as if the government haven’t already allowed the rentiers to take that one over. It isn’t just because people are getting coverage and can actually see a doctor, when it is referred to as the only most successful aspect of ACA, it is also the most profitable. But the claw backs are going to get even more extensive.

  12. tongorad

    What’s wrong with these people?

    They are as out-of-touch with their subjects as Kim Jong Un and equally as ideologically hide-bound.

  13. ke

    The point of money is information, and information is energy. Ultimately, you want the energy employed by the community to return increasing standards of living. Arbitrary fiat and its digital derivative tells you what issuers want you to know. Removing the feedback loop for effective decisions doesn’t educate anyone.

    Religious leaders tell you that if you let them put you through hell, you will go to heaven when you die. State leaders tell you to borrow and spend today and they will take care of you tomorrow, by taxing someone’s kids. Either way you are screwed, but at least with the State you get a party to go with the migraine.

    Every dollar spent producing and
    Distributing cardboard food instead of nutrition
    costs $10 in healthcare misdirection. The Big Pharma false promise to cure the resulting disease multiplies the cost. Public education directly destroys the economy by preaching State mythology, and multiplies healthcare costs by systematically eliminating a questioning public with peer pressure political correctness.

  14. ke

    When you drop those $100s in town, you can see where they go. What you want to know is whether they come back, how long it takes and if your standard of living increased; who did you give it to?

    You’ll notice that the empires first move is to eliminate community self sufficiency, and the next is to push demographic variability, which can only result in income disparity, favoring the idle issuer telling every else what to do with an expert system.

    Any community that provides for its own needs…food, clothing, shelter and energy, can print money, and , leverage it trading surplus. Plants produce everything so whether you are crossing the street, going to Mars, or jumping a galaxy, you might want to replace State mythology with basic biology, chemistry, and physics. The sooner you give children some decent language, the sooner they can give you some perspective.

    1. ke

      Like everything corporate, healthcare is largely a make work jobs program. Can you imagine telling doctors you are just going to pay them $40k/yr to find something else to do?

    2. ke

      The data clearly demonstrates that we are dumbing people down to fit into a system that is getting dumber every day, successively choosing the lessor of two evils, in a race with ourselves to the bottom.

  15. nat scientist

    Whatever the Clintons’ say, there will no attack on costs or incentives to direct individual rationing. The plan is using language to confuse the facts that the taxpayers will be shorn to pay for whatever the costs that her mega-clients decree. That the R-O-W kick industry butt to make the inalienable right to Life real, is their gain that was invented here in 1776. HRC gets the job done,,,for the powers that be, for the powers that pay the speaking fees. Public option gets the reliable clawback from the weak hands in perpetuity, and the DTSA (Defend Trade Secrets Act May 11, 2016) keeps them down on the plantation, their home on the voters. Two crime families seeking dynasties by repealing the estate tax is the name of this media frame.

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