Employer-sponsored insurance is deteriorating. What about fixing it rather than replacing it? | xpostfactoid

Employer-sponsored insurance is deteriorating. What about fixing it rather than replacing it? | xpostfactoid
by Andrew Sprung
Medicare for All's main political liability, as the presidential campaign has made clear, is loss aversion: most Americans are insured,  most are reasonably satisfied with their coverage, and a significant minority consider their top-drawer coverage a major asset. Americans also have ample cause to doubt their government's capacity to completely remake the country's healthcare system and serve as the sole source of major medical insurance to everybody.

At the same time, Medicare for All speaks to a current reality: employer-sponsored insurance (ESI), which covers the majority of Americans under age 65, is deteriorating, and Americans know it.  Kaiser Family Foundation tracking poll results released last week neatly capture the core household worries related to healthcare:

About two-thirds of Americans say they are either “very worried” (35%) or “somewhat worried” (30%) about being able to afford unexpected medical bills. This is larger than the share that say they are worried about affording a variety of expenses, including other types of health care costs as well as other household expenses. About half of insured adults say they worry about being able to afford their health insurance deductible (49%) and four in ten (40%) worry about being able to afford their premiums. More than four in ten adults overall worry about affording prescription drug costs (45%).

The vulnerability to out-of-network billing -- and Americans' awareness of that vulnerability -- is staggering. 65% worry about unexpected bills! That fear also stems from the relentless rise of deductibles, which, as Kaiser CEO Drew Altman pointed out in an op-ed last April, "rose eight times faster than wages between 2008 and 2018" -- i.e., 212%.  Altman's conclusion has been a Kaiser drumbeat, reiterated in every tracking poll report:

it’s the candidates who can connect their plans and messages to voters’ worries about out of pocket costs who will reach beyond the activists in their base. 

Lawmakers could take substantial bites out of those rising costs with legislation that bans balance billing and empowers Medicare to negotiate drug costs for all payers (as in the House-passed HR 3), and Democrats should be promising loudly that they'll get those tasks done (notwithstanding that Democrats in thrall to healthcare providers have impeded balance billing legislation so far). But deeper structural change is needed.

The solution preferred by almost every Democratic presidential candidate who balked at a complete government takeover -- including Joe Biden -- is a strong public option available on an affordable basis to everyone, including those with access to an employer plan. The theory is that employer-sponsored insurance will either die on the vine or be forced to compete with a public plan that pays much lower rates to healthcare providers. The Medicare for America Act of 2019, a strong "Medicare for all who want it" bill, explicitly levels the payment playing field by stipulating that providers who accept the public plan must accept the same payment rates from private insurers.

Those seeking maximum results with minimal disruption, however -- that is, minimal increase in government spending and new program design and implementation  -- might argue that we're viewing the rising cost program from the wrong end of the telescope. Instead of vastly increasing the government's role as insurer, why not reform private insurance -- mainly ESI?
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