Timothy Faust ,?????? ??????? March 13, 2020

He Doesn’t Have a Plan for That

Joe Biden’s health care solution is a remix of failed ideas Phil Roeder

This was supposed to be an analysis of Joe Biden’s health care plan. Except—Joe Biden doesn’t have a health care plan. Not really. His campaign website has a section labeled “HEALTH CARE,” but it offers little of substance or meaning. Instead, he stays true to his promise that “nothing would fundamentally change” and puts forward a policy slate so useless that analyzing it feels like trying to teach a dog to play checkers.

Biden’s health care plan mirrors the rest of his campaign in that it presents no new or useful ideas; no fix for what’s broken; no vision; no hope; no future. In its place, Biden presents a mishmash of nostalgic flotsam—ideas that haven’t worked in the past, intermingled with stillborn iterations of proven-ineffective corporate-friendly policies, all wrapped in the vague promise of, “Obamacare, but this time, we’ll do better.” But new versions of failed ideas are still failed ideas, and Joe Biden’s aping of Obamacare returns a still-unsatisfactory health care model.

There are two core issues in American health finance: coverage and cost. The question of coverage is straightforward: “How many people are covered by your insurance model?” Biden aims to cover an estimated 97 percent of Americans through a hybrid public option plan—leaving nearly ten million people uninsured. That’s more than the population of New York City or Michigan. Tens of millions more will remain underinsured, as they are today—at least 56 million as of 2018—with little relief from Biden. (To be underinsured means that the cost of using one’s insurance is prohibitive enough to prevent a person from seeking health care when they need it.) Even in the Biden camp’s most ecstatic campaign-promise fantasy, he will let lack of insurance and underinsurance kill tens of thousands of Americans a year. And these are, of course, rosyestimates—even the Congressional Budget Office reckoned in 2013 that a public option would have “minimal effects” on the total health insurance enrollment rate.

New versions of failed ideas are still failed ideas, and Joe Biden’s aping of Obamacare returns a still-unsatisfactory health care model.

The question of cost is: “How do we pay for health care?” Health care costs are a function of two things: how often health care services are used, multiplied by the unit costs of each service. In America, we use health care less often than our peers in other countries; our skyrocketing medical costsare driven by our insane prices. (“It’s the prices, stupid,” said patron saint of humanistic American health policy Uwe Reinhardt.) These prices are set by pharmaceutical companies, device manufacturers, fanged hospital corporations, and the private equity firms that increasingly own them.

Without system-wide price-setting, the more payers in a health care market—the more private insurance companies; the more state programs; the wider the spread—the less ability payers have to negotiate prices, and the higher the overall systemic costs. The smaller a given insurer’s patient base, the weaker its ability to negotiate prices, and the higher itscosts. To bring these prices to bear, Medicare for All uses monopsony—a model in which Medicare, the single payer in “single-payer health care,” sets the price it’s willing to pay, and health care providers can’t afford not to accept it.

What Joe Biden’s plan offers is weak by comparison, even compared to the plans of other former 2020 Democratic candidates. Instead of letting his public option use Medicare prices, in turn giving Medicare more cost-setting power, Biden posits that it will have to separately negotiate its own prices with hospitals and health care providers. And if his public option is small, those prices will be high. Biden’s plan leaves the runaway costs of private insurers unchecked. Under it, our approximately 4 percent yearly health care spending increase—more than twice the rate of inflation—will continue unabated.

Biden’s public option is born to lose. His promises are vague by design—empty, platitudinal horse shit that will keep private insurance companies profitable. His plan is both self-defeating and disastrous for its users.

First, the self-defeat. In debates, Biden pitches his public option as the insurer of last resort—a place to go if you have cancer, or hepatitis, or a pre-existing condition which makes private insurance too costly. This is how you design an insurer that will fail. Insurers need a large number of healthy, uneventful people who pay in to the system and offset the costs of those expensive few who have serious health conditions—this is called a “risk pool.” By building a public option which exists to catch people too sick for private insurance, the public option’s risk pool is weakened and its costs skyrocket—while the private insurers, freed from the burden of insuring seriously sick people, bring home a tidy profit.

Outside the public option, Biden proffers a complex array of means-tested premium subsidies to people who seek to purchase insurance on the individual market, a hangover from the Obamacare era. Under his plan, premiums are capped at 8.5 percent of income—meaning a person who makes $50,000 a year has to shell out almost $4,300 just to buy insurance. That doesn’t take into account how goodthe insurance is, or how much they have to pay to useit. Beyond basic efforts to curtail drug prices, Biden has almost no plan to bring down system costs for health care, and deductibles will continue to rise. In 2020, a forty-year-old with a low-tier bronze plan on the Affordable Care Act exchange has to pay a $6,500 deductible, in addition to their premiums, before their insurance “kicks in.” Biden’s plan does little to combat these costs. It would not, for example, prevent such a patient from going bankrupt or losing his home (similar, unfortunately, to how Biden himself once considered selling one of his houses to deal with his son Beau’s medical costs).

Biden’s focus on premium costs reveals his inability to—or unwillingness to—confront the real costs and prices of health care. His plan is not, as much as he wants to insist, about cost reduction. It is a plan to use public money to subsidize private insurance companies, who in turn slough their costs back upon patients.

Beyond his insurer-of-last-resort, Biden offers a “premium-free” public option plan to people who are eligible for Medicaid under ACA expansion standards but live in states which have refused to expand the program. He claims he can “automatically enroll” people making below 138 percent of the federal poverty level. This is untrue. Any program which requires a means test is incapable of automatically enrolling eligible people, since they must first go through a complicated enrollment and eligibility process to receive benefits. This is why states have to spend time and money seeking CHIP-eligible children and persuading their families to enroll—a process which leaves hundreds of thousands of children unenrolled.

Biden’s health care plan asks us all to bank on the idea that we’re going to be the lucky ones forever.

This is just a surface-level examination of Biden’s health care policy, but looking at it in aggregate, you have to wonder whether Biden actually knows how insurance works. Conflating premiums with deductibles; refusing to tackle most systemic cost drivers; creating obstacles to enroll in the public option while promising automatic enrollment; claiming “universal coverage” while leaving millions uninsured—these are not the hallmarks of a well-considered health care policy, but a desperate attempt to cobble together ideas from the Obama era which didn’t work then and won’t work now. You cannot in good conscience claim health care is a “right” and put forward a plan which leaves the poorest, sickest, and most vulnerable behind.

That Biden’s health care plan would fail isn’t secret knowledge. Any observer with a lick of sense could tell you that it’s a big load of nonsense, and those who insist otherwise either think you’re stupid or are getting paid to tell you things are fine. Considering how the health care industry has backed Biden to the hilt to stave off Bernie Sanders’s Medicare for All plan, or that health insurers gained almost $48 billion in market value overnight after Biden’s Super Tuesday comeback, it could be both.

But despite what insurance companies and their PR firms insist, single-payer is not an unpopular plan. Twenty consecutive primary states’ exit polls have found the majority of voters favor getting rid of private insurance. People like being insured, but over two years of traveling the country to talk about health care, I’ve met nobody who is fond of their particular insurer, who denies their claims, restricts their doctors, and gets in the way of their health care.

The thing about health care costs is that they’re transient. Some people spend their entire lives under the boot. Some years you get hit by a car or fall off a ladder or have a complicated pregnancy and incur huge medical costs. Some years you don’t. But we all take our turn dancing in the fountain of misery. Some years you get so sick you have to choose between staying alive or going into debt. Some years you’re just unlucky. Some years you’re one of Biden’s ten million uninsured. Biden’s health care plan asks us all to bank on the idea that we’re going to be the lucky ones forever—and offers no relief to us when we, inevitably, fall into the pit. It is not a plan. It is a gambler’s fantasy.

On Monday night, Joe Biden gave a mealymouthed explanation of his intention to veto any Medicare for All plan that came across his desk. Meanwhile, nearly a hundred million people are suffering from inadequate health insurance. A hundred million more are afraid. Biden refuses to look these problems in the eye, instead suggesting a cavalcade of tweaks to the thicket of post-ACA health policy: slow death by a thousand paper clips. He doesn’t even have the courtesy to tell us we can have something better.