‘Medicare for all’ arrives in COVID bill

If they’re successful, millions of people will migrate from some form of private sector health insurance to government sector health insurance — a huge step toward “Medicare for all.” What many conservatives have long feared is finally coming to pass. What does the Senate version of this legislation contain in the healthcare space?

In addition to coronavirus-specific government spending that one might expect — more money for vaccinations, for example — there are serious spending increases to two of the main government healthcare programs, Medicaid and Obamacare. Most of these changes are technically temporary, but the long history of these things is that Congress routinely reauthorizes them in year-end packages. With respect to Medicaid, the bill gives states a powerful incentive to expand their Medicaid programs by having federal taxpayers pick up 95% of the tab for the increase. It’s an offer states can’t refuse.

The other government expansion of healthcare spending in the bill is arguably worse, a big hike in Obamacare subsidies. Under the plan, refundable and advanceable tax credits to purchase Obamacare plans would increase such that anyone enrolled at less than 400% of the federal poverty line would pay no more than 8.5% of their income for a plan. That’s down from 9.78% today (most would be capped at a much lower rate than this).

To put that in context, 400% of the federal poverty line is $105,000 for a family of four with two children, $71,000 for a single mother with one child, and $54,000 for a single person. These households would only have an Obamacare premium responsibility of 8.5% of their income ($9,000 for the family of four, $6,000 for the single mother, and $5,000 for the single person). Income even a little below this level qualifies for much more generous caps. For many Obamacare participants, their responsibility to pay premiums is zero.

While these Medicaid and Obamacare subsidies are technically temporary, the long history of government healthcare programs is that they get bigger, not smaller, over time. Having already conquered healthcare for seniors with Medicare, this relief bill tries to finish the job of “Medicare for all” by expanding Medicaid to both the poor and near-poor and by expanding Obamacare for the working class all the way up to the middle class. Most of the work of universal government healthcare will nearly be done.

There is one remaining holdout from universal, government-run healthcare — private sector health insurance plans provided by employers. 157 million people (about half the country’s population) are on these plans. Over time, that number is expected to decline as workers age into Medicare and as Medicaid and Obamacare become more palatable alternatives (after subsidies) for younger workers.

Conservatives are not historically fans of employer-provided care. We much prefer individually based coverage, in which routine expenses are paid for by consumers in free markets acting as rational spenders and insurance is reserved for rare and expensive outlier events. But in the environment opponents of “Medicare for all” find ourselves in, well, it’s any port in a storm. Put bluntly, the choice is no longer primarily between employer-provided coverage we don’t like and individual coverage we do like — it’s between private insurance (increasingly only found in workplaces) and government insurance.

This relief bill has provisions to provide temporary employer tax credits and subsidies for the unemployed to secure COBRA coverage (their old private workplace plan) after being laid off, tied to the timetable for unemployment benefit extension. This is an example of reasonable and targeted support for coronavirus-affected workers, which preserves private sector health coverage, instead of using the pandemic to ratchet up government healthcare in what will turn out to be a permanent way. Republicans should support targeted private COBRA aid while opposing government Medicaid and Obamacare increases.

Ryan Ellis is the president of the Center for a Free Economy, which is a member of the Coalition Against Socialized Medicine.