How Democrats Finally Won with Health Care

AP Photo/Andrew Harnik

House Minority Leader Nancy Pelosi, foreground, speaks at a news conference on pre-existing health conditions on Capitol Hill. 

Update (November 21, 2018): 

The Washington Post reports:

Rep. Brian Higgins of New York said he had changed his mind [and endorsed Nancy Pelosi for speaker] after securing an “agreement in principle” that Democrats would undertake a “serious good faith effort” to advance legislation lowering the Medicare eligibility age to 50 as well as a trillion-dollar infrastructure blitz. 

In a statement, Pelosi praised Higgins … and said his proposal to allow Americans as young as 50 to “buy in” to Medicare is “central to this debate, as we work to build on the Affordable Care Act.”

In the piece below published yesterday, I was urging Democrats to focus on early eligibility for Medicare as the most feasible and politically potent idea for substantially advancing health-care reform. Pelosi’s agreement to make a “serious good faith effort” on that issue should push it to the forefront of discussion among House Democrats in the run-up to the 2020 election. That will raise a host of questions about what such a measure would look like in practice—just the discussion I have been hoping for to advance this idea on the progressive agenda.

It took a long time, but the Affordable Care Act finally paid off politically for Democrats in the 2018 election. According to exit polls, voters rated health care the top issue, and they trusted Democrats on it more than Republicans. The big questions now are the impact the election results may have on health policy in the next two years and the lessons Democrats should draw for 2020 and beyond.

In 2018, unlike the other elections since the ACA’s passage in 2010, voters had seen what Republicans were actually proposing to do about health insurance. “You’re going to have such great health care at a tiny fraction of the cost, and it’s going to be so easy,” Donald Trump promised in 2016. But when it came time to deliver, the legislation passed by Republicans in the House and endorsed by Trump would have resulted in millions of people losing coverage and sharply increased costs for others, especially for older people buying insurance in the individual market. Unable to pass that bill in the Senate, Republicans saw the whole repeal-and-replace effort collapse.

Seizing on the Republicans’ failed rollback, Democratic congressional candidates and the groups supporting them highlighted health care more than any other issue. According to an analysis by Wesleyan Media Project, 54.5 percent of all Democratic ads from September 18 to October 15 discussed health care; those ads focused overwhelmingly on protecting people with preexisting conditions and on Republican efforts to undo the progress under the ACA. “We’ve made it about their sabotage, their repeal agenda. We’ve kept the focus on them,” the head of the liberal group Protect Our Care, Brad Woodhouse, told The Washington Post in an article published on election day.

Not only do the election results put an end, at least for the next two years, to Republican congressional efforts to undo the ACA; the voters also chose to extend coverage. Five states are now likely to expand Medicaid—three (Idaho, Nebraska, and Utah) where voters passed referenda in favor of expansion, and two (Kansas and Maine) where a shift from a Republican to a Democratic governor removes the last obstacle to expansion. Two states, however, did see setbacks. The defeat of a tobacco tax on the ballot in Montana and the election of a Republican as governor of Alaska put previous Medicaid expansions at risk, though it’s unclear whether those will be reversed.

So is the ACA now a settled achievement? Unfortunately, no.

Republicans are still resisting and undermining the reforms. They continue to pursue litigation to declare the law unconstitutional. (The conservative judge in the case now pending may well have postponed a decision until after the election to avoid damaging Republicans’ electoral chances.) Fourteen Republican-controlled states, including Florida and Texas, still have not expanded Medicaid and show no signs of doing so. 

Nationally, the Republican Congress and Trump administration have already adopted measures that are going to weaken the reforms. The 2017 tax legislation effectively repealed the individual mandate as of this coming year, which, according to the Congressional Budget Office, will lead to four million fewer people insured in 2019 and 12 million fewer in 2021. The administration has also approved regulations for “short-term health plans” and “association health plans” that will allow insurers to circumvent the ACA’s rules for required coverage of pre-existing conditions and services such as mental health care. As a result, insurers offering junk coverage at cheap prices will be able to skim off healthier people from the ACA’s marketplaces. The long-term result of these changes will be to raise premiums in the marketplaces, seeming to confirm conservative predictions that the ACA is unworkable.

In the new Congress, Democrats in the House will try to move ahead with legislation to stabilize the marketplaces and improve coverage, as well as reforms to control pharmaceutical prices (an issue where as yet they have no consensus). But if any changes to the ACA reforms make it through the Senate and into law, they are unlikely to solve the problems that Trump and the Republicans are deliberately bringing about. 

So as the 2020 election shapes up, the battle over the ACA is likely to continue, and Democrats will need to fight to preserve the gains made so far. At the same time, they will also be looking to develop a more ambitious program. 

Think of the choices for the future this way: The United States now has three principal national platforms for publicly supported health insurance—Medicare, Medicaid, and the ACA marketplaces—that reforms might extend. As recent developments have shown, both Medicaid and the ACA marketplaces have severe political vulnerabilities and limitations. Deep red states not only have refused to expand Medicaid under the ACA; many of them are also imposing work requirements and other rules that will result in many otherwise eligible people losing Medicaid coverage. The ACA marketplaces have faced obstruction from the same states. Even where the marketplaces have been working relatively well, most of the enrollees end up in plans at the silver or bronze levels that leave them with substantial out-of-pocket costs and difficulties in paying for services. 

In contrast, Medicare does not suffer from vulnerability to red-state resistance, and it has done a better job of controlling costs and ensuring access to care. That’s why I agree with many on the left who want to expand Medicare. But for a variety of reasons—the fiscal costs and tax implications, the perceived threat to people with good private coverage, opposition from seniors, and not least of all, the guaranteed, full-throated resistance of the health care industry—"Medicare for all” will be too great a lift politically even if Democrats win back the White House in 2020 and eke out a majority in the Senate.

The more practical objective, as Harold Pollack suggests in a recent New York Times op-ed, is to make Medicare more widely available. Even here, though, reformers have to be careful, lest employers and state governments dump all the high risks into the Medicare program.

As I’ve argued before, the most practical way forward—and the one most likely to be successful in practice—is to open up Medicare to people age 50 to 64 and to extend the use of Medicare prices in the ACA marketplaces. Under a proposal I call “Midlife Medicare”—a stepped-up version of what others refer to as a Medicare “buy in”—people age 50 to 64 who are otherwise uninsured would be able to apply the ACA premium subsidies to purchase either a public Medicare plan or a private Medicare Advantage plan. The coverage could follow the lines of the ACA’s “essential health benefits,” while payment rates were based on Medicare’s prices. 

The Medicare framework has three advantages over the ACA framework. 

  • First, “traditional” Medicare serves not only as a “public option” but as a benchmark for the pricing of private options. 
  • Second, that Medicare benchmark is equivalent to the gold level in the ACA (80 percent of average expected costs, not 70 percent as in an ACA silver plan or 60 percent as in a bronze plan). 
  • Third, when Medicare beneficiaries go out of network in a private plan, they still pay only Medicare rates, a rule that effectively caps what providers can demand from insurers to be in-network. As a result, Medicare has a system of price regulation applying to both public and private plans—a means of limiting costs that doesn’t exist anywhere else in the American health-care system.

“Midlife Medicare” wouldn’t only offer a benefit to people age 50 to 64. By drawing the more costly older population out of the risk pool in the ACA exchanges, it would also substantially lower premiums for the people under age 50 remaining.

A program geared to 50-to-64 year olds has important political advantages. Many seniors think of Medicare as being distinctly for them and worry that if Medicare were for everyone, they would lose the special protection they’ve earned. But the 50-to-64 year olds have also earned that protection, and AARP seeks to represent all Americans 50 years of age and up.

Moreover, by the time they reach midlife, Americans are generally more concerned about health care and more likely to make it a voting issue. Here there is a lesson from the 2018 election about the key importance of framing health-care appeals to voters in midlife. In an article in Politico, “How Democrats Won over Older Voters—and Flipped the House,” Zach Stanton, Steven Shepard, and Ruairí Arrieta-Kenna point out that not only was health care “the single-most-discussed issue in political ads in 2018” but many of these ads focused on the provision in the Republican House bill that would have allowed insurers to charge individuals age 50 to 64 more than five times as much as younger people:

In races from upstate New York to the Arizona-Mexico border to Cedar Rapids, Iowa to the suburbs of Richmond, Va., Democratic challengers flipped GOP-held House seats while running ads accusing Republicans of supporting this so-called Age Tax, using a term popularized by the political arm of the AARP. 

Democrats continued in 2018 to enjoy more support among younger voters. But exit polls indicate that instead of losing voters age 50 to 64 by ten points (as they had in 2016), Democrats this year virtually erased that gap. The focus on health care helped make that possible.

Many in the Democratic base want nothing less than Medicare for all, and whoever wins the 2020 presidential nomination may well endorse that as a goal, as some candidates already have. But if the candidates focus on what is likely to be achievable, “Medicare for more” will make more sense than “Medicare for all.” And the practical step here will be to move Medicare into midlife.

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