Medicare for All Could Solve the Problems of Obamacare

Forty years ago, we had a fight about health insurance in this country; a political struggle over how to cover the uninsured. On one side was President Richard Nixon, who advocated bringing the uninsured into the existing system of private insurance through an employer mandate—a law requiring corporations to buy health insurance for their workers. On the other side were the liberals, led by Senator Ted Kennedy, who advocated a system in which Medicare would expand from insuring only the elderly to insuring every American. Because this would make Medicare the only entity to pay many healthcare providers, and thus their only payer, a program of this kind is called a single-payer system. In many other rich countries, such systems of national health insurance are as ordinary as public schools.

For decades to follow, that was the political terrain: liberals supported a single-payer system that expands public health insurance to cover the uninsured, while conservatives supported mandates that expand private, for-profit health insurance to cover the uninsured. To the usually slight extent that radicals concerned themselves with health policy, they admired the Cuban system, in which the government runs the hospitals and the medical schools and systematically allocates medical resources to meet the health needs of the population, rather than the demand of the market.

Those were the old politics of health care. Since President Obama's election and his passage of the Affordable Care Act (ACA), the entire political spectrum has taken a large step to the right on this issue. Now radicals may look longingly to Cuba, but in practice they support single-payer. Liberals, now rebranded as progressives, may quietly pine for single-payer, but in practice they're willing to settle for the plan that Obama borrowed from Nixon. Conservatives today have no plan to cover the uninsured, and they regard their own previous plan with an increasingly unhinged hatred since its enactment by a black Democratic president.

Before the enactment of the ACA, Barack Obama himself supported single-payer, saying as a state senator that, "I happen to be a proponent of a single-payer, universal healthcare plan." As president, of course, he enacted the ACA, a law known to all of its enemies and some of its friends as "Obamacare”. This law creates a system of insurance exchanges on which uninsured, non-poor Americans are legally mandated to buy health insurance. To buy insurance on an exchange, the system has to take you through three stages: eligibility determination, buying insurance and enrollment. Right now all three are dysfunctional, but none would be necessary under a single-payer system.

The first step is to enter your income and some other financial information. If your income is less than 138% of the Federal Poverty Level (FPL), then the system should shunt you off to be covered through Medicaid. If your income is 138-400% of FPL, then the system should send you on to the exchange with a subsidy to help you pay for health insurance. (People with incomes greater than 400% of FPL are required to buy insurance but receive no subsidy.)

Currently, the system is incorrectly sending some Medicaid-eligible people to the exchanges and some Medicaid-ineligible people to Medicaid. Also, many of the subsidy calculations are incorrect, telling people a subsidy amount higher or lower than that which they will eventually receive. These errors of eligibility and subsidy determination are problems in a process that wouldn't exist under single-payer. With all Americans included, there would be no need to decide who was eligible and who was not.

If your income is too high for Medicaid, then the second stage is to register an account on the site, browse the health insurance plans available in your state and choose one to purchase. This is where the most well-publicized computer problems of the ACA exchanges crop up. Some people have tried dozens of times to buy insurance on the exchanges but remain uninsured because the websites don't work properly. This, too, is a problem in a process that would not need to exist under single payer: if all Americans were automatically enrolled in Medicare by virtue of having been born, then there would be no need to buy private insurance from for-profit companies who regard your health care expenses as "medical losses."

Finally, once you have registered an account in the health insurance marketplace and pushed the button on your computer to purchase a particular plan, the exchange's computers must take all the personal information that you entered into their system and send it on to the insurance company whose plan you bought. They do this with an electronic form called an 838, which is a piece of old, simple, reliable technology that has been standard for decades in the health insurance industry, but which the ACA exchanges have somehow managed to mangle. (One individual told the website that he had a spouse and two children, and then for some reason the website lumped them all together and told the insurer that he had three spouses.)

Although these back-end problems have not been as widely reported, they may be the most serious failure of the system. If the administration were to fix all the eligibility and purchasing problems, but not fix these enrollment problems, then people could go through the process online and think they had bought insurance, only to learn upon going to a doctor's office that their supposed insurer had never heard of them. Again, if Medicare covered everyone, then there would be no need for software that communicates between government-run exchanges and private insurers.

Under a single-payer system, the Center for Medicare and Medicaid Service's could simply connect its computers to those of the Social Security Administration and automatically enroll every living person who has a social security number or taxpayer identification number. Thus could all of this confusion have been avoided. We can continue to run 50 state Medicaid systems alongside 50 state insurance exchanges that have to communicate with private health insurance companies. All 100 of those systems have mutually exclusive pools of eligible individuals, plus private insurance through employers, plus labor union plans, plus Medicare for the elderly, plus the Veterans Administration for service-connected disabilities. But it would be far simpler, better and cheaper to enact a single national health insurance system that just covers us all in one risk pool, with everybody in, and nobody out.