Kamala Harris does not want to abolish the private insurance industry. We can now say that for certain, thanks to the official health care plan her presidential campaign released on Monday, a moderately detailed document that lays out the candidate’s broad vision for expanding Medicare to cover all Americans, while assuring voters—a bit deceptively—that it can be done without a significant middle class tax hike.
Up until now, Harris’s position on health care has been a wobbly question mark. The senator consistently claimed to support the idea of “Medicare for All,” but appeared to waffle on the important question of whether she would ban private insurers from competing with the government’s health plan, a controversial but important feature of the single-payer bill championed by her opponent Bernie Sanders, which she at one point endorsed. Adding to the confusion, she recently said that, unlike Sanders’ proposal, her plan wouldn’t raise taxes on the middle class. “I’m not prepared to do that at all,” she told CNN. This led Joe Biden to mock her for living in a “fantasy world.”
“You have to find $30 to $40 trillion somewhere,” Biden told a crowd recently. “How are you going to do it?”
Harris does not have a good answer to that question yet. But the proposal she released Monday at least brings some clarity to the broad outlines of her plan, including the private insurance issue. The candidate envisions a three-step process:
Step 1: She would immediately allow all Americans to buy in to a new “transitional” Medicare plan. This is patterned on Sanders’ bill, which creates a temporary Medicare buy-in plan to tide folks over until his new single-payer system is in place.
Step 2: Then we enter the transition period, which is supposed to last 10 years. (Yes, as in a full decade. Sanders’ version envisions a four-year transition). During that time, children and the uninsured would be automatically enrolled in the transition plan, while the government would “provide a commonsense path” to get everybody else on it as well. Employers could still continue offering private coverage during this period, or sign up for the transitional Medicare plan.
Step 3: After the transition, we’ll have a brand-new system in which everybody will be enrolled in a bigger, better version of Medicare. As part of this system, private insurers will be allowed to sell strictly regulated insurance plans under the aegis of Medicare, much as they do today as part of Medicare Advantage, allowing a bit more variety in the market and a bit more choice for individuals who want to pay for it.
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The plan is similar in spirit to another health care proposal, known as Medicare for America, that’s gotten a little bit of traction in Washington and has been backed on the campaign trail by Beto O’Rourke. That bill would create a new, expanded Medicare program and automatically enroll Americans without employer-sponsored coverage into it, but would allow businesses to continue offering their workers private health plans as a perk, as long as the insurance is at least as good as the government’s policy. The major difference, it seems, is that in Harris’ version, private insurance companies would actually have to operate within the Medicare program, not just match it in terms of quality. Both approaches are designed to create a robust, government insurance program where the private sector mostly exists to offer a bit of additional choice.
So Harris has in fact created a program she can credibly call “Medicare for All” that does not eliminate private insurance as a fallback option for those who want it. Box checked. Mystery solved.
Harris’ plan starts to get murky, however, when it comes to the question of how she’d pay for the thing. Sanders has proposed several ways to finance his plan, though it’s not clear they would actually come close to covering the whole cost. Two key pieces are a 7.5 percent payroll tax on employers and a 4 percent “income-based premium” on most households. Sanders is not hiding this: He has argued clearly that while many businesses and households would pay more in taxes, they’d come out ahead by saving on insurance premiums.
Harris doesn’t try to make that argument. She says that Sanders has put forward “good options” for financing his plan but that a 4 percent premium “hits the middle class too hard,” and proposes “that we exempt households making below $100,000, along with a higher income threshold for middle-class families living in high-cost areas.” Harris wants to make up the difference by putting in place a $2 trillion financial transactions tax that would hit stock and bond trades. In short, she’s promising the middle class something for basically nothing.
It’s possible that Harris’ team has run these numbers and they pencil out. But from what they’ve released, it appears they are relying on some accounting gimmicks to make the math work. (I asked the Harris campaign for some additional information on their plan, but it didn’t respond.) Congress usually calculates the cost of federal programs based on a 10-year budget window, so you can hide expenses by backloading outside of that time frame. I’m guessing that’s the point of Harris’ decadelong transition to “Medicare for All.” “By extending the phase-in period to ten years, we will decrease the overall cost of the program compared to the Sanders proposal,” her proposal states. And that’s true—for the first 10 years.
It’s kind of refreshing to see a presidential campaign implicitly admit that it’s just playing with numbers that only a few budget nerds will care about. And there’s obviously some lol-nothing-matters political logic to it; the chances of Congress ever passing something as ambitious as full-on “Medicare for All,” or even a modified version like what Harris is pitching, are slim. So what’s the point of committing yourself to the unpopular tax hikes that are probably necessary to make such a bill a reality? Impressing policy reporters doesn’t get you that far in the Iowa caucuses, after all.
But it also feels, fundamentally, a little cynical, like a plan that’s designed not to be implemented. Harris isn’t willing to spend political capital arguing for the sort of tradeoffs most people think will be necessary for to make “Medicare for All” a reality. And with a 10-year time frame, there’s a decent chance Harris would have to rely on a Republican successor to carry out her vision faithfully, which seems unlikely. Harris has clarified her stance on health care. But you have to wonder how committed she really is to it.