[00:00:08] Welcome to the Primary Ride Home for Friday April 12th 2019. I'm your host Chris Higgins. Today, for the first time ever we're spending most of the show on one issue. I'm taking a deep dive on what the latest Bernie Sanders Medicare for All plan is, what it might mean for you, and how we might pay for it. After that, a look at what's happening on the ground in Iowa and a quick perspective on fundraising overall. Here's what you missed today on the campaign trail.

[00:00:44] On Wednesday Senator Bernie Sanders introduced the Medicare For All Act of 2019. This is, according to The New York Times, the 5th version of the bill, but this time, Sanders has 14 senators cosponsoring the legislation, including his primary opponents Cory Booker, Kirsten Gillibrand, Kamala Harris, and Elizabeth Warren. Note that Amy Klobuchar, the other sitting senator in the race, is not on that list as she is pitching a more centrist approach to modifying Obamacare. Now I should also mention: those senators who signed on have also endorsed other plans that are more incremental so they're not 100 percent tied to the Sanders plan. OK so we're going to dig into this plan. I have read about a dozen articles on it, links in the show notes as always. And I read part of the hundred page bill and I'm doing that so you don't have to if you don't want to. I'm actually breaking this up into two segments on the show today just so there's a chance to breathe in the middle. So let's buckle up and talk policy. At its core, Medicare for All is about expanding the existing federal government Medicare program so that it would cover all Americans, not just those who are 65 and older. In the current Sanders vision, this would intentionally destroy the private insurance market as we know it today. So if you have a private health insurance plan that you like right now and Medicare for all becomes law you're not going to have that plan anymore. But you can still pick your doctor and the bet that Sanders is placing is that you'll actually like the Medicare system better, because for you and for your doctor it will be way simpler.

[00:02:22] Now the first issue to tackle is what happens to the private health insurance market in a Medicare For All scenario. After all, these companies are the core of Obamacare. Sanders basically says nuke it from orbit. It's the only way to be sure that Medicare would truly be the single standard in the country. But the reality is that some form of private health insurance will survive no matter what. Well, why? Because there will always be things that are not covered by Medicare and this is currently true even in other countries with single payer systems. Some things you might need to cover privately are super specific high cost drugs or certain kinds of specialized care. So there will definitely be some kind of market to get that stuff even in a Medicare for All world. Now, how expensive that would be if you want to buy that private insurance? Probably super expensive. Let's just be clear on that. But one goal of Medicare for All is to make it so that essentially the 99 percent get everything they need from Medicare. No extra costs, not even a copay for a doctor visit or even a hospital visit. Okay, next up we have to talk about how medical insurance actually works financially so that we can get into a discussion of what Medicare for All might cost.

[00:03:41] So, let's do health insurance 101 right now. Today, in the current system, every health insurance provider including Medicare has to negotiate with every service provider like doctors and hospitals and stuff, and every drug provider, to arrive at a price for every service and every drug. That's why some plans don't pay for certain doctors; they didn't agree on a price, or the doctor couldn't keep up with all those negotiations with all those plans. That's also why some plans don't cover some drugs; they couldn't work out a deal. Now the net result of all this negotiation is that your private health insurance pays the same doctor a different rate for the same service when compared to somebody else's private health insurance or compared to Medicare, and—famously—Medicare usually pays less in part because it has a huge number of people signed up. That big group makes Medicare's negotiation position much stronger. The New York Times cites Charles Blahaus, a senior research strategist at the Mercatus Center, who pegs that difference in price at about 11 percent on average, meaning the same service paid for by private insurance costs the insurance company about 11 percent more than it costs Medicare. This is a broad estimate across all services and all drugs. But it does give you an idea of why just mathematically switching everybody over to Medicare would make sense and might even save money. So the big business idea behind Medicare for All is that it would create a single negotiator with a giant group of people.

[00:05:19] In this case literally all Americans signed up under one plan, and that gives that one player, the US government, tremendous power in negotiations with doctors and drug companies. Let me read from The New York Times here:

"...patients in the United States pay the highest prices in the world for prescription drugs. That's partly a result of a fractured system in which different payers negotiate separately for drug benefit. But it also reflects national preferences. An effective negotiator needs to be able to say no and American patients tend to want access to the widest array of cutting edge drugs even if it means paying more. A Medicare for All system would have more leverage with the drug industry because it could bargain for the whole country's drug supply at once. But politics would still be a constraint. A system willing to pay for fewer drugs would probably get bigger discounts than one that wanted to preserve the current set of choices. That would mean though that some patients would be denied the medications they want."

OK, so this does raise another issue, which is that if Medicare for All does end up paying doctors and hospitals and drug manufacturers less than they currently make now, how does that affect those people and those companies? Well, it's actually kind of simple: it gives them a pay cut. Sanders seems fine with that and maybe there's an argument that you could, like, make it up on volume or something, but that is a key concern when we are talking about people's health.

[00:06:49] You don't want people dying as a result of trying to push more of them through a hospital more quickly to bring in more money. Then again, you don't want people dying because they can't afford health insurance at all, which is the problem we have today. So really — which problem would you prefer? And you may ask yourself: what does this plan cover? Like, you know how right now your dental and your vision is from some other weird company and there's like a different amount of coverage for that stuff? Well in the Sanders plan, it's all in one. Everything. Hospital visits, regular doctor visits, medical devices, lab tests, maternity care, prescription drugs, vision, dental, substance abuse treatment, even hearing aids, which are typically not covered right now. All join up as part of this version of Medicare for All. This is actually way more generous than countries like Canada, where people have to take out private policies to cover vision and dental and sometimes prescription drugs and a handful of other services. Oh, and also the Sanders plan says that there are no co-pays for doctor visits or hospital visits. There is a maximum $200 copay each year for prescription drugs which is way, way more generous than plans today. Plus, it's different than Medicare is today. Medicare today has a 20 percent copay after your deductible. So this super limited copay thing would definitely affect how much this program costs, at least on the government side. Okay, so the last part of this first segment on the Sanders plan is how would we move from the current private insurance system to Medicare for All.

[00:08:31] Well, in the new plan, Americans would have four years to transition into the new program from their private insurance and away from today's Medicare. Oh, and by the way, Sanders leaves the Veterans Affairs health system and the Indian Health Service alone, letting those populations continue with what they've got today. And how this four year transition happens is also kind of novel. The idea is that each year, the eligibility age for Medicare would drop down by one decade. So currently the age of 65. So after four years you would have twenty five year olds on Medicare after the full transition. Now after that I presume they would just include everybody else so the kids get in there too. Now, before we take a break, I want to give you a few quotes from Sanders himself on why he believes so strongly in Medicare for All. And specifically this version of Medicare for All. Because there are a lot of different ones and this is probably the most extreme. Here's Sanders from ABC News:

"Health care is a human right, not a privilege. It is not a radical idea to say that in the United States every American who goes to a doctor should be able to afford the prescription drug he or she needs."

Now, let's take a deep breath, and come back in just a moment.

[00:10:29] All right, once more back into this bill. This time, lots of money talk. The next big issue is how much it would cost to run to administer a giant Medicare for All system and whether that would be more or less efficient, and thus more or less costly, than the current system of private companies competing with Medicare and each other. I'm gonna make this one simple. Economists agree that a Medicare for All system would be cheaper to run than the current mix of systems. And that would overall reduce the cost of health care for Americans. Now, by how much? Nobody agrees. Not at all. But it's clearly less and maybe a lot less. Or maybe a very small bit less. And next up, let's face it, the biggest piece of the Medicare for All puzzle is: how do we pay for this? Specifically, who pays for it? And by what mechanism? Today, most Americans are covered by private health insurance that is paid for in part by their employer and in part by them individually in the form of paying part of their employer plan plus co-pays plus deductibles. Then there's the group who don't have employer provided health care. Now, I was in this group for years and it was not fun. In that case, you individually purchase a health insurance plan for yourself. It's usually super expensive and kind of bad for the price.

[00:11:52] And right now, you find those plans through Obamacare exchanges. Now, the next group is simply people who are already on Medicare which is funded by the federal government a.k.a. your tax dollars. Then, there's Medicaid which is technically a state program which again is funded by your taxes including a substantial chunk of federal tax money flowing into those state programs. And then you have folks who don't have any health insurance at all, who tend to show up in the emergency room during a crisis. Now, who pays for that? Right now, it's actually kind of hard to say. Some of that falls to the hospital, some to the person themself assuming they can pay for it, some of it is dealt with on the local level like the city or the county might subsidize the hospital. But this is kind of a hidden cost. It's like a cost of doing business right now if you are a hospital. This kind of cost, that is driving up prices for the other patients and therefore the insurers, would not go away in a Medicare for All system, but it would be factored in from the start because everybody would be covered, and the hope is you'd go to the doctor because you don't have to pay for the doctor visit, rather than waiting until you have to go to the hospital. And given all of that,

[00:13:04] I had again asked the question who pays for Medicare for All. Specifically, like, what is the mechanism by which money gets into the Medicare trust fund, if it has to cover all the people in all of America. And what's interesting about this question is that most candidates really don't like to talk about this part and even the Sanders plan is kind of fuzzy on it, but everybody knows the only way to pay for this, and especially the really snazzy stuff, like no co-pays and adding in dental and vision and stuff is through, you guessed it, taxes. Americans already pay a Medicare tax if we earn any wages. I pay it, you probably pay it, but many of us also pay for private health insurance in some form, and this is where the real political problems start. Medicare for All is not a wacky pipe dream or like suddenly health care becomes free. No, not at all. The initial logic is: take the money you're already paying for your private insurance and just shift that over into the Medicare tax. The reason people typically don't put it that bluntly is that Americans tend to feel like taxes are bad but buying things like insurance is good. But this is a case where, to start with, you're talking about moving money around and potentially getting a benefit just by doing that because Medicare gets the better rates.

[00:14:26] Now if, and economists do differ on the specifics here, if Medicare for All is cheaper overall, then you save money and more people are covered. And that is why we would do it in the first place. But there is one more giant wrinkle here. Remember, there are 28 million uninsured people currently living in the US, some of whom are unemployed or for various reasons don't pay federal taxes. How do we pay for them? We can't just move their taxes around if they're not currently paying them. Well, Sanders wants to tax the rich to pay for this. Sanders released a five page paper listing possible funding sources for Medicare for All, and one of them is a new tax on what he calls "extreme wealth." In other words, the ultra super duper rich people. He also separately suggests a 70 percent marginal tax rate on income over 10 million dollars, or increasing the estate tax, or pushing some costs back onto employers, or some other stuff. A lot of these ideas are unpopular and you wouldn't need all of them to get it done. But it's still tricky to figure out which ones you could use and still make it pencil out. And Sanders has not done that math; that is left as an exercise for later. And now we get to our final point in this Medicare for All segment. Part of what has people freaking out about Medicare for all is that the total amount of taxation and spending for the program would be huge.

[00:15:55] It would become a truly giant line item in the federal budget. It would be way bigger than say the entire Defense Department. Now, the Defense Department is also funded by your taxes but still this change would be disruptive, and we just don't know what it would do specifically to the overall economy of the US, like, what happens when private insurers go out of business or have to sell tiny boutique plans to super rich people. And what happens when those drugmakers get less money for their drugs? Do they make fewer drugs? And what about the doctors and the hospitals that are getting lower rates too, but probably more patients at the same time? What does all of that do? What is the net effect? And the truth is we don't know. Even with economists trying to project what they think might happen, all we know for sure is that this would be a huge change. But Sanders believes that disrupting the system and finding out what happens is worth it because there is a moral imperative here. We are talking about life and death. We all seem to agree that the current health care system is broken and the Sanders plan is one vision to crack that system in half to break the wheel with the genuine hope that on the other side we are all healthier.

[00:17:13] It requires a lot of optimism and a lot of work to make that happen. But that is what Sanders is asking Americans to do. In non Medicare news, the Des Moines Register has been tracking Democratic events in Iowa. They actually have a web database we can go in and search by candidate, or party, or month, or even, like, day in city, to find out who is where in Iowa. There's a link to that in the show notes, and the big headline news is that this year so far there have been 299 individual events from Democratic primary candidates in Iowa alone. In an article discussing the phenomenon, the Register also mentions that Elizabeth Warren's team is hosting what they call "office hours" with their organizers set up in Iowa coffee shops, plus holding house parties to promote their candidate. Beyond that, Bernie Sanders has almost 20000 volunteers in the state, and other candidates have set up shop too. Check the link in the show notes for more details on just how much stuff is already happening in Iowa right now. And finally today, on Twitter, NBC News Senior Political Editor Mark Murray puts the current primary field in perspective, in terms not of money, but of people. Individual donors.

[00:18:39] He writes, "Yes, 2020 Democrats so far are raising less than the 2008 Democrats per the Q1 numbers but they have many more donors. In Q1 of 2007, Obama had 104,000 donors. That's compared with Sanders with 525,000 donors, O'Rourke with 163,000 donors, Buttigieg with 159,000 donors, and Harris with 138,000 donors." Murray also points out the average dollar per donor math, and what's fascinating there is that Obama's donors at the same point in his winning primary cycle averaged $240 per donor. Well, for Sanders, it's just 35 bucks a donor. And O'Rourke is $58. Buttigieg $44 and Harris $87. All of those radically below where Obama was per donor. Now, this is what grassroots politics looks like in 2019. The takeaway here is that even at this early point in the cycle, Democrats are extremely engaged compared to previous elections. They are spending small amounts of money, and they're spreading that money around among many candidates. There's still a ton of time to raise big money, but the primary candidates right now are building up giant lists of people, and you know what you need to win an election? A lot of people. Although I will admit that money doesn't hurt either.

[00:20:12] That's it for another episode of the Primary Ride Home. I've been your host, Chris Higgins. You can follow me on Twitter @ChrisHiggins and oh, what a week this has been. If you didn't hear the earlier shows this week, I promise none of them are deep dives into health care policy. So, you know, maybe check those out as well. Also, one story I didn't have time for today is that Andrew Yang is experimenting with campaigning as a hologram. So more on that next week, I guess. All right, I will talk to you all on Monday.


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