Healthcare industry hostile to Medicare for All

By | March 8, 2019

House Democratic leaders are swiftly moving legislation to shore up Obamacare, saying they have a mandate from voters to fight back against the Trump administration’s “sabotage” of the healthcare system.

The proposals they are weighing align neatly with the desires of the healthcare industry by injecting billions of federal dollars into Obamacare. While they’re likely to lower what patients pay for coverage and to boost insurance rates, they include no measures to control overall healthcare spending.

“They are looking to increase their revenue, and I don’t see anything that is potentially going to reduce healthcare spending,” Gerard Anderson, professor of health policy and management at the Johns Hopkins University Bloomberg School of Public Health, said of the measures supported by the industry.

Health insurer, doctor, hospital, and drug company lobbyists have been busily working in the new Congress to protect Obamacare. For years they have defended the law, formally known as the Affordable Care Act, against Republican attempts to repeal it. Now, they’re fending off calls from liberal Democrats to overhaul the healthcare system.

They are mounting a vigorous attack against the Medicare for All Act, legislation backed by Sen. Bernie Sanders, I-Vt., and other liberals to enact a fully government-financed healthcare system. They are fighting just as strongly against “public option” plans that would allow more people to buy into Medicare or Medicaid instead of private health insurance, warning that these plans would lead to massive disruption and long waits for care.

These same industry groups came to the negotiating table as willing participants during the Obamacare debate and feel they have invested significantly in making the law work. They don’t want to upend a system they have spent nine years getting used to.

“Whether they liked it or not when the law was passed, the industry is now invested in the ACA framework for better or for worse,” said Sabrina Corlette, research professor at the Center on Health Insurance Reforms at Georgetown University’s Health Policy Institute. “From their perspective, it’s sort of the devil you know.”

But that doesn’t mean they don’t have a wish list. The Blue Cross Blue Shield Association, which sells a large portion of Obamacare plans, recently proposed the federal government boost Obamacare subsidies to higher-income and younger people and increase funding to help low-income people pay for out-of-pocket costs.

Tom Nickels, executive vice president of the American Hospital Association, said in a recent statement that the group supported “strengthening the marketplaces to improve their stability and affordability, and increasing enrollment efforts to connect people to coverage.”

That’s largely where the legislative efforts in the Democrat-controlled House already are. The Energy and Commerce Committee is considering a bill that would add $ 10 billion a year in reinsurance funds, which go toward paying higher medical claims to keep Obamacare premiums at bay. A related proposal would fund $ 100 million toward navigators who help people sign up for plans through Obamacare exchanges, while another would boost outreach funding to make people aware of the exchanges. Both were cut by the Trump administration.

Corlette acknowledged the measures wouldn’t do much to constrain healthcare spending, but added that they “don’t pretend to be major cost containment.”

“You could take each of those bills and articulate a pretty clear policy rationale about how they would help bring premiums down and get more people covered, and it’s perhaps not surprising that those bills don’t just have support from industry but also patient and advocacy groups and those who care about access and affordability,” she said.

When it comes to addressing healthcare spending, industry groups say that more can be done to boost transparency and to eliminate duplicate services, but that ultimately more spending isn’t necessarily a bad thing.

“We are covering millions more people in the U.S.,” said Carmela Coyle, CEO of the California Hospital Association. “Certainly that never meant we were going to spend less. We were going to spend more. We were providing more care for more people.”

House leaders have said they would be open to other, more sweeping healthcare proposals once they are satisfied that Obamacare’s exchanges are stabilized, but liberal Democrats view the U.S. healthcare system as broken far beyond the problems facing Obamacare. They note that nearly 30 million people are still uninsured, and point to a Commonwealth Fund study showing that 29 percent of people who get coverage through work are “underinsured,” meaning they pay for a good portion of medical expenses themselves despite having coverage.

An aide to Sanders, who is running for the presidency and is a longtime champion of government healthcare, said fixes to Obamacare were okay for now, but the calculation would be different if a Democratic president were to be elected.

“We can’t tell them to wait around until you have Democrats in control of everything,” the aide said. “But if Democrats do have control, we have to think about what our actual plan is to fix the healthcare system.”

For now, momentum is behind the industry-favored approach. Just hours after the formal introduction of the Medicare for All Act, the 101-member New Democrat Coalition urged the caucus to focus first on shoring up Obamacare with billions of dollars in federal funding, calling it more pragmatic. The plan is similar to an Obamacare stabilization package that failed last year in the Senate after Democrats objected to its anti-abortion language.

Democrats have been unable to say how they would work around that impasse in pursuing the policy again, and GOP leaders have shown little interest in revisiting Obamacare. This means a proposal to shore up Obamacare might have to wait for a Democratic president after all.

If that happens, powerful industry groups will continue to oppose letting people buy into Medicare or Medicaid, both of which reimburse at a lower rate than private coverage. They would also oppose the way the Medicare for All Act would let the government set drug prices, its limits on how much money hospitals get for care, and its gutting of private insurers.

“Everybody wants a significant private-sector role because everybody makes more money when the private sector is involved,” Professor Anderson said.

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