Sep 20, 2019 - Health

Democrats and the "public option" options

Illustration of democratic donkey wearing stethoscope and medical mask

Illustration:Rebecca Zisser/Axios

The Medicare for All debate is often defined as a single-payer system versus a public option that preserves a role for private insurance — but there are big differences among the public option plans that the 2020 Democrats have proposed.

Why it matters: These differences impact enrollees' pocketbooks, the burden on taxpayers and the amount of disruption a public option would have on the existing system.

Driving the news: Mayor Pete Buttigieg released his health care plan yesterday, meaning that all of the top-polling candidates now have proposals to compare and contrast.

  • With the exception of Sens. Bernie Sanders and Elizabeth Warren, all of these candidates' plans preserve private health insurance to some extent.
  • “They have different flavors of generosity of benefits, of aggressiveness in enrollment, and aggressiveness in cost containment," Democratic consultant Chris Jennings told me.

Here's how they handle the tradeoffs.

Enrollment: Some plans move closer to universal coverage than others by using automatic enrollment measures. But higher enrollment usually means higher cost to the taxpayers.

  • For example, Medicare for America — embraced by former Rep. Beto O'Rourke — would automatically enroll the uninsured, people with Affordable Care Act plans, Medicaid beneficiaries and newborns into a beefed-up version of Medicare, Vox reported earlier this year.
  • By contrast, Buttigieg's plan would focus on auto-enrolling a smaller universe of people. It would automatically enroll low-income people in states that didn't expand Medicaid into the public option, along with anyone who is uninsured but eligible for free Medicaid or public option coverage. It would also retroactively enroll anyone who receives care but isn't insured.
  • Former Vice President Joe Biden's plan would only automatically enroll the Medicaid expansion-eligible population in non-expansion states.

Cost containment: Some of the plans would aggressively limit prices — which would lower costs for patients but inevitably draw massive pushback from providers.

  • Buttigieg would cap out-of-network provider payment rates at 200% of what Medicare pays. It would require all bills for medical care at in-network hospital facilities to be billed as in-network.
  • O'Rourke's Medicare for America plan would pay doctors at Medicare rates, per Vox, which are generally much lower than what private insurance pays.
  • Biden would focus on tackling market concentration.

Disruption: Some of the plans have wider-ranging effects. While some people would be happy to give up their current coverage, others would be livid.

  • Biden and Buttigieg would both build on the current ACA structure, but add a public option and allow those with employer insurance to opt into it.
  • O'Rourke would essentially require everyone to either have their employer-sponsored insurance or the Medicare-like public option, eliminating the ACA marketplace and Medicaid.
  • Sen. Kamala Harris's health care plan, after a transition, would require people to choose between an expanded Medicare plan or a similar, highly-regulated plan administered by private insurers.

The bottom line: Presidential candidates' policy proposals inevitably change over the course of the campaign and, if elected, as reality sets in.

  • But the differences in today's plans illustrate the choices and tradeoffs that anyone who wants to implement a public option will eventually have to make.
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