Health care policy analyst Jon Walker discusses his proposal for transitioning the United States to a single-payer health care system with Shadowproof publishing editor Brian Sonenstein.
Walker’s plan, known as the Medical Insurance And Care For All program or MICA, is a public health insurance system based on Medicare but open to all individuals. Under the plan, employers are required to buy MICA for their employees or private coverage of equal or better quality. Any U.S. citizen without employer coverage is enrolled in MICA and charged for it in their taxes.
Walker shares what led him to draft MICA, how it differs from other single-payer proposals, and the decisions and trade-offs he considered in devising the plan this way. He also discusses the transition strategy baked into MICA, which would diminish the health care industry’s power, minimize health care disruption, and undermines opposition from outside the industry.
Listen to the interview using the player above or on YouTube. The following is an edited transcript.
BRIAN SONENSTEIN: Tell us the impetus for writing the bill, the motivation behind it, and how you got here.
JON WALKER: We are probably heading to a very important moment in about three years. We will probably see a Democratic Party elected in at least the House in 2018, and you’ve got a good chance of seeing a Democrat elected in the White House in 2020. There is usually a brief moment after a party wins big when they’ve got a chance to push through major legislation. We saw this with George Bush with his tax cuts. We saw this with Obama with the Affordable Care Act. We saw this just now with the GOP trying to push through repeal and replace, and barely failing at that.
This is an effort to get the conversation started now, to work out the details of a health care plan for that moment. Because there is not enough time in that brief window to put together all the details and work through all the problems. That needs to be done well ahead of time.
With the ACA, you have hospitals, insurers, and a bunch of other groups all organizing around trying to come up with a plan like that. They had been laying the ground work for that for years before it actually made it Congress.
So, that is the impetus for why I put together this now and the conversation I hoped to start with it. And it’s all about getting this discussion going to address all these issues before the moment of action comes. Because if that window’s missed, it will probably be another four or five or ten years before another moment for something like this comes up.
SONENSTEIN: Some people might say there is a bill introduced every session for Medicare For All in Congress. There was the plan in California that recently got held up. Why did you decide to write this plan and why did you decide to do it at the federal level?
WALKER: Most of the plans you’ve seen so far have been about messaging, about building popular support for the idea of single-payer healthcare. And that’s good. That needs to be done, and that work has been done for years. But we are now transitioning from the point where you don’t just raise general support for the idea. You’ve got to raise it for a specific proposal.
I saw this in the marijuana legalization field. [The Marijuana Policy Project] and other groups put up different bills on the ballot. They failed because people were like, we don’t like this provision, we don’t like how this was done, and then they went back to the drawing board and rewrote those provisions and changed those things. They had to do that several times before they finally coalesced around an actual plan with real details that they could get passed.
If you look in the California bill, they didn’t even have a funding source in it. That was relentlessly attacked. How are you going to pay for this? And they didn’t have a good answer.
The bill in Congress right now, the Medicare For All plan, I think it’s a great plan. I think it’s sort of a very good thing to say this is the ideal of what we want. That has a lot of giant hurdles politically that it would run into that I don’t think are battles worth dying over.
The reason I wrote it at the federal level is it is so much easier. There is ERISA, which prevents state from regulating employer-sponsored insurance, which is a big chunk of the entire private market. There’s also the issue of counter-cyclical spending. During a recession, people still need healthcare but they don’t have jobs and they’re paying less in taxes.
At the federal level, that’s fine. You can borrow money during a downturn. That’s easy. At a state level, you’ve got to balance the budget every year or every two years (however the states are designed). That becomes a real problem to build that into a system. That creates a new layer of complexity on the complexity of the healthcare system.
SONENSTEIN: Give us a general breakdown on what MICA does.
WALKER: The bill would basically create a Medicare-like program that everyone would automatically be eligible for. The way it would work is if you don’t have insurance through your employer you’re automatically on this plan and you automatically have a tax applied or a premium charge, however you want to define it. Then you get immediate very good basic public health care.
If you want to go and buy private insurance, you can do that with your own money. We won’t stop you from doing that, but I don’t think most people want to do that. It doesn’t make sense for most people. If you’re very wealthy, you want a private doctor that gets flown in to see you. That’s something you can do.
And if you currently have employer health care, the rules change so that employers have to at least provide you something as good as MICA or they provide you MICA. Or if they don’t do any of that, they have to pay a fee into a fund that pays for MICA for everybody. So it’s a fairly simple and straightforward way to work in the confines we have to transition to a system where everyone is automatically qualified for good, basic public health insurance.
SONENSTEIN: Why did you choose to expand coverage through the employer market as opposed to lowering the Medicare age?
WALKER: If you’re going to do something as big as single-payer or any sort of health care reform, there rea going to be people, who are automatically opposed to it. The insurers, hospitals, the drugmakers—they are going to be making less money when you put price controls on it. They are going to oppose any plan. But there is another nebulous set of people, who don’t like change or who might lose out if you change the tax structure of how you’re paying for different things. Those people you can win over if you do it right or you can lose if you do it wrong. That is really directed to those people.
My plan is basically about taking the money, which is currently going to the health care industry. We pay twice as much for health care as the UK does, and basically taking that money and redirecting it back to all the regular people. The plan is to make everyone that’s not the health care industry better off. I’m not trying to radically changing things, I’m just trying to make everyone better off in a way that they’re somewhat familiar with.
SONENSTEIN: Talk about the decision to not abolish the private market and some of the politics and strategy behind this choice. What would the bill do to shrink the industry or change the coverage provided now? What would the private insurance industry look like after MICA?
WALKER: I think it is important for people to look at other health care systems they want to be like. And one thing you do when you look at some of these very socialized single payer-type systems is none of them have completely done away with private insurance. In the UK, in Denmark, in Canada, they either have supplemental policies or they have these private insurance policies that you can get through your employer that guarantee you faster, quicker access to doctors, private hospital beds, those type of things.
I think the idea that you’re going to completely get rid of the private insurance market is just not feasible when looking at other countries. I also think it would create a lot of anger trying to do something that countries haven’t done. Because that’s not what should be the main focus. The main focus should be making sure every one has basic access to care.
What the law would do is it would, one, make all private insurance sold have to be as good as MICA. The MICA plan is probably way better cost-sharing, coverage-wise than 95 percent of employer plans currently out there. So it’s going to have to be very good. And it’s going to have to compete against this public health insurance plan.
You can look at Australia as an example of this. Most people are covered by this basic insurance plan, and they’re very happy with it. If you’ve got extra money, you want to get things better, because there are always going to be people who want to get things better—shutting the door on that doesn’t make sense.
The other level is look at how angry people were when Obama promised no one would lose their current plan and some people did. I don’t feel there is any need to “force” people off their employer coverage if they claim to really, really like it. What you’re just going to have is this alternative for employers to choose that could be way better, but then that’s the employer switching over. It’s not the government making you do it, and I think that’s really important to get the politics of it right.
SONENSTEIN: As soon as anyone sees there is any private insurance, they say the motivation is still around profits. There’s still going to be motivation to price gouge. I know you talked about some of the ways, based on the standards of MICA, that wouldn’t be possible. But how would MICA make things better for those who need health care most?
A lot of the hopes and dreams of the ACA were pinned on providing affordable insurance to people who really needed it. I think that’s a major motivating point for people.
WALKER: This program would make sure everybody who is in the country within the confines of the law is automatically qualified for what is a very good health care plan. Basically, the MICA is like Medicare except with several of Medicare’s problems fixed—lower co-pays, lower cost-sharing issues. There is the limit on out-of-pocket costs, which Medicare doesn’t have. A government-run drug program—you know, Medicare has a Medicare Part D, which is wasteful private market nonsense.
Effectively, everybody regardless of what is happening to them, regardless of income, regardless of anything else, has this insurance automatically. The only reason they would not have this insurance is because they have a better private plan. There’s always going to be people on the top end, who are going to use their money to buy better things, whether it’s better insurance or entirely private health care practices that we currently have in this country, which don’t even take insurance at all and are just purely for rich people to pay out-of-pocket for everything. There’s always going to be that in basically anything.
The issue is creating this system with no gaps, no holes in it. Everybody gets it. Nobody will run into affordable problems. That is a big problem with the Affordable Care Act. Not only are there holes in it but the people who are “covered” by the program face these crazy deductibles that make it very unusable. That is all addressed.
SONENSTEIN: I appreciate it comes from the standpoint of, “What are the trade-offs we have to make?” Like you said, when you started, it’s time to put rubber to the road. It’s time to stop talking about messaging and start talking about what are the political obstacles, especially as you put forward different proposals. What opponents does that create?
One of the things I saw a lot of people asking about was a zero-cost system. I know I talked to you about this a little bit. You had some rationale for having things like co-pays. Talk about what some of the trade-offs would be by having a zero-cost insurance system, where health care was basically free. Does that exist anywhere?
WALKER: There’s no health care system out there that’s truly zero-cost. Most health care systems out there, like Canada and Britain, they usually have something you’re paying for, whether it’s over the counter medication, prescription medications. Dental in Denmark. A bunch of single-payers have modest co-pays on different services.
The reason I went with some very small and limited co-pays is because I know how the [Congressional Budget Office (CBO)] when it comes to the costs they’ll estimate for policies. A no co-pay system would probably come across as scoring maybe 15 to 20 percent higher by the CBO. I don’t think that would be accurate. I don’t think that would be that bad. But I don’t think it is worth dying on that hill because you don’t want a co-pay of $20. And the co-pays would be structured so if you’re making very little money, you effectively have no co-pays.
It’s not unreasonable that if you’re a middle class family, a twenty dollar co-pay to visit a specialist or something of that nature, that’s far less than the co-pays I have under my current plan.
That is a debate worth having. That’s something we need to collectively decide. I don’t think it’s worth that bigger price tag. Because that is also something that can be changed after the fact, too.
SONENSTEIN: A lot of people are also asking about the means testing strategy in there. I’ve talked to you a little bit about this. Why include means testing in here?
WALKER: The means testing in the bill is very modest because the actual co-pays are very modest too. And so, the question you run into is, this sort of goes back to a lot of CBO scores and studies that show some little out-of-pocket incentive. You want someone to first try over-the-counter Claritin before going to the doctor to ask about a problem because that’s just cheaper. If you don’t have a mild incentive for people to do that, the CBO will score it as costing a lot more. But if you add in those mild incentives, you don’t add in means testing, you’re just hurting this very, very low end.
We’re talking about co-pays that for the average person in a year would add up to two, three, four hundred dollars at the most. I think that’s reasonable for most middle class families. There are poor people that is not reasonable for, and so the question would you rather create a system to help a few people on the low end with a small problem or would you rather make it flat for everybody at a dramatic cost projection?
I don’t think it would increase costs that much, but the cost projections the CBO would say would possibly scuttle the entire effort. So I think it’s worth that trade-off.
SONENSTEIN: When this was shared by some health care journalists, I saw the words single-payer put in quotes. Or they were saying this was single-payer-like. What are your thoughts on true single-payer in that regard?
WALKER: I think we’ve got a problem with how people use language. There is one theoretical definition of single-payer, and that’s where nobody except for the government pays for health care. That doesn’t exist anywhere.
In Canada, people pay for some prescription medicines. They pay for dental. There’s insurance companies who cover some costs not covered by the insurance company. In the UK, there’s some private insurance companies by employers. People still pay for band-aids. People still pay for face lifts or boob jobs at cost. That’s not covered by the government.
Using that as a definition of single-payer is kind of worthless in discussions. I’d be happy if we used 80 different terms to describe every single health care system, but that’s just sort of not practical in a political sense. So my interpretation of single-payer, the one that I think is most widely shared when people are talking about it, is one where everybody automatically qualifies for a government-run insurance program that doesn’t exclude the fact that if people want to pay more for additional private care or if people were paying some costs for more things (cosmetic surgeries not covered by basically all health care systems out there)—I think that’s the definition to go with.
If you’re saying this isn’t single-payer, you’re basically saying Denmark is not single-payer. Australia is not single-payer. Basically every country we consider single-payer is not single-payer. And I just don’t think that’s a helpful definition for discussing politics.
SONENSTEIN: There are a couple other areas, where I would like your thoughts. One of them comes under eligibility, where we talk about automatic enrollment is limited to citizens and legal residents. Could you talk about the decision to do that and the challenge in confronting health care for undocumented immigrants and whether or not this might be a place to do it?
WALKER: We are talking about taking on a major industry that is 17 percent of the economy. I think it is important to keep the health care fight focused on the health care fight. And there is a real desire by some groups to try and include in the health care fight sort of all other fights. Currently, we pay for things with a progressive tax code and deal with issues of immigration and everything and that just leads to it being bogged down.
Ultimately, when it comes to something like undocumented immigrants, you can’t really address that piecemeal. Even if you say someone qualifies for a program, what is stopping a Trump after being elected saying you signed up for this indicating you are undocumented, we can just pick you up [and deport you]. You have to deal with undocumented immigration as an issue.
Now, if you pass a single-payer bill, you created a simple and easy path to immediately deal with that aspect of it. If you pass immigration reform before this, it’s not an issue. I think it is critical to focus on one task at hand and try not to make this into an amalgamation of every dream, every hope in one place.
SONENSTEIN: Another area that I am curious to hear your thoughts on is the issue of reproductive rights and reproductive health care. What would be the interplay between something like this and the Hyde Amendment and how would that shape the battle on health care reform?
WALKER: I think people bring up this issue, and I really don’t know how much it would be an issue. I have a tough time believing that if we elected a Democratic Congress prepared to move forward with a plan like this that it would be anti-choice at the same time. So I think it’s less of a concern that people often talk about if we’re projecting forward into the future.
The other thing is there are more abortions paid for by public health insurance plans in this country than are there are private health insurance plans. Most private health insurance plans don’t really cover non-Hyde-approved abortions. Even if they do, almost every insurance plan out there now in the employer market has significant deductibles.
The irony is even under this plan, even if there was a Hyde Amendment covering everything, you’re still likely that a woman seeking an abortion would still probably pay less for health care that year under this plan than they would currently.
It’s become a real ideological thing, but you really have to look at a breakdown of the numbers around how it’s happening. It’s very rare to wind up in a situation like that with private insurance paying for abortion. Most women with private insurance, who went to get an abortion, paid for it all out-of-pocket and did not have it covered by their insurance.
SONENSTEIN: Can you talk specifically about the benefits versus the pitfalls of doing the employer strategy versus lowering the Medicare age? What are some of the risks of going the route of lowering the age?
WALKER: I support lowering the age. I support all of these ideas, don’t get me wrong. I just want us to rally around what is the most feasible way of getting it done.
You run into a problem with lowering the age. Drug makers and the hospitals don’t oppose single-payer because they don’t like government-run health insurance. They would actually enjoy having a simplified bill processing issue. They oppose it because they oppose any kind of cost-control.
They would oppose the cost control measures you see in a place like Switzerland or the Netherlands, where they use a regulated private insurance system with big cost controls. They are going to oppose anything that pushes cost controls on them, and if you lower the Medicare age, they are going to likely fight that just as hard as they would Medicare For All. Except, now you’ve got a plan that only benefits a small slice of people with the same amount of opposition against it.
The other problem you face going that route is there will be a highly disruptive tipping point most likely. You can probably lower the Medicare age a few years to where nothing changes.
Let’s say once you get to the point where you’ve lowered the Medicare age to 45, then a bunch of employers decide to start dropping coverage. Almost all of their employees are over 45. They’re getting Medicare through this. You’d see a massive dropping of coverage in the market. Then you need an immediate fix because everything is overwhelmed. Everything is being changed over. People are getting very upset. People do not like disruption. Even if it may eventually lead to positive end, most people are going about their daily lives. Telling them, oh, three years from now this will get lowered again and you’ll get covered. That’s not going to make people happy.
Another issue with lowering is you’ll need to create a new tax to pay for that Medicare as you’re lowering the age. You’ve got this system where you’re benefiting these older people, and whatever tax you’re applying—unless you’re creating a specific tax only for older people—you’re likely to create a system where you create some people who are losers. Maybe some younger people who are paying some of the tax, even if they’re younger rich people. You’re going to create this new class of losers that is going to create another subset of opposition in addition to the health care industry. I don’t think that is effective politics, given how big of a challenge we face.
SONENSTEIN: What do you hope will come of it? What can people do with this plan to get more eyes on it?
WALKER: Getting more eyes on it, just sharing it around to your friends and family. Sharing it with your elected officials. Tell them you support it. Different groups you might be a part of that want to talk seriously about this. People can attend local Democratic meetings and suggest putting things like this on their platform on the local level and state level.
Building support takes a long lead time to create a tipping point, and it’s all about preparing for that moment when Democrats can take action.
My final thoughts about it is I’m not saying this is the plan we have to go with. I’m saying we need to think item by item, what is it that we want? And what I want is a universal health care system where everyone is assured basic health care coverage that is affordable, and I think this is the best way to do that.
I’m open to hearing other options, but they have to explain why their plan is not only better policy but why they think it has a chance. I think this plan has a chance because what it does is rather than redefining how we do taxes, redefining everything else while redefining our health care system, it basically takes what everyone is currently paying for health care, makes it less, and gives them better health care. Because we reform the health care industry, which is in terrible shape, not designed to help people, just ripping people off and focused on profits.
It is all about redirecting money from that industry to people but within a way that people are used to, and I think that is our best hope.