Kamala Harris’ deeply unserious healthcare plan

Up to this point, Harris has tried to stake out the position that she supports a role for private insurance while endorsing the Sanders plan that effectively eliminates it. It has put her in an untenable position in interviews. So ahead of this week’s debate, she unveiled a new proposal for preserving a role for private insurance within a government-run insurance system.

In her vision, within 10 years, all Americans would transition into a government-run Medicare system. She would allow private companies to administer Medicare plans as they do currently within Medicare Advantage. But the more important question for individuals is not whether, a decade from now, they may be able to purchase a plan that is issued by a private company. The more relevant question is whether they will be able to keep the insurance that they’ve purchased either individually or through their employers, and under the revised Harris plan, the answer is no.

Harris makes it clear that, “At the end of the ten-year transition, every American will be a part of this new Medicare system.” She also notes that, “Unlike the current system, private plans in the new Medicare system will be held to stricter consumer protection standards than they are today.”

So, just like Obamacare led to the cancellation of private plans that did not meet the requirements dictated by Washington, Harris’ plan would lead to the cancellation of Obamacare plans as well as employer insurance.

Harris pitches a 10-year transition period, but the reality is that Americans are likely to see their employer coverage go away long before that. She would allow all Americans to “buy in” to Medicare immediately and promises that the new plan would, “cover all medically necessary services, including emergency room visits, doctor visits, vision, dental, hearing aids, mental health, and substance use disorder treatment, and comprehensive reproductive health care services.”

But the more generous the new plan promises to be, the faster that the employer-based insurance system will erode, as businesses decide to dump workers on the new government plan. So that means many people happy with their current plan would lose their coverage and have no choice but to enroll in the government plan well before the 10-year period comes up for the elimination of all employer insurance.

In a carefully worded promise, Harris says, “Under my plan, no one will lose access to insurance during a transition. Period.” In other words, nobody will lose access to some sort of insurance plan, but they just might lose access to their actual current plan that they like.

Harris gets further ahead of her skis in a question and answer page on her website when she asks, “Will I be able to keep my doctor under Medicare for All?” and answers, “Yes. 91 percent of eligible doctors participate in the Medicare program today.” But the current Medicare program is not an accurate point of comparison, because it exists within a universe in which doctors can afford to get paid less from Medicare, because they can shift costs by charging more to private insurers and those paying out of pocket. With everybody in the same government-run system, they will no longer have that option. Many doctors are likely to decide not to take the new Medicare plan, to retire early, to evolve into concierge practices in which those who can afford to would pay them some sort of annual fee. The only way to avoid this would be for the government to pay them more, which then would explode the cost of the program.

Speaking of costs.

Harris argues that, “By extending the phase-in period to ten years, we will decrease the overall cost of the program compared to the Sanders proposal …” But this is classic misdirection by Harris. The phase-in period has no real relevance when it comes to the long-term cost. Sure, if Harris’s plan takes longer to put everybody on a government insurance plan, it would spend less in the first decade. But when it comes to long-term cost, what matters is how much the government would be spending once they’re fully phased in, and the longer transition period does not matter for those purposes.

In addition, she argues, that “we can save additional money by accelerating delivery system reforms and value-based care that rewards meaningful outcomes.” This is something that politicians like to say to signal that they’ve thought deeply about healthcare policy, but it’s the same sort of promises President Barack Obama made when selling his healthcare law, and yet here we are, 10 years after a massive government intervention having the same conversation.

Harris also argues that she will save money by “limit[ing] profits for drug companies and insurance companies.”

But prescription drugs, which get a lot of attention, only account for 10% of all healthcare spending. Even if government could figure out a way to reduce drug prices and eliminate insurer profits, the majority of spending in the healthcare sector comes from either hospitals (33% share of spending) and doctors (20%). They are harder to demonize than insurers and makers of expensive drugs, but that’s where most of the money is. So a new government system would have to chose between putting the hammer down on doctors and hospitals, leading to a financial strain and access problems at a time when hundreds of millions of people would be promised expanded health coverage. Or, continue to pay them lots of money, and see the cost of the program explode even more.

Whatever “savings” Harris thinks she can wring out of the system, keep in mind that it would be more than offset by the cost of adding dental, vision, and other coverage to existing Medicare, and then promising that same generous coverage to the entire population. Even as she would be creating significantly more demand for these services, she has not detailed how she would ramp up capacity to meet this demand.

Finally, Harris tries to build on her recent absurd lie that she would be able to achieve a socialized health insurance system without raising taxes on the middle class. Instead, she floats a series of new taxes on the top 1% as well as “an income-based premium paid by employers.” The new tax on employers would inevitably be passed on to middle class workers in the form of lower salaries. But even putting that aside, there’s no way that she would be able to raise enough money to provide generous free healthcare to the entire population without the middle class paying more.

Even the liberal Economic Policy Institute recently released a model tax and budget plan that included many items on the liberal wish list. It noted, “Almost all other spending in our budget could be accommodated with revenue raised strictly from the top 2-3%. But a spending commitment as large as single-payer healthcare requires more broad-based tax changes on top of these explicitly progressive taxes.”

The bottom line is that Harris wants more running room from the legislative language in the Sanders plan that she supports, while remaining to Joe Biden’s left, and so this should be seen more as a political positioning document than a serious effort to grapple with healthcare policy.