CBO: Achieving near-universal coverage

October 7, 2020

Topics: Quote of the Day

Congress of the United States, Congressional Budget Office, October 2020

In this report, CBO describes the key features—specifically, the enrollment process, premiums, cost sharing and benefits, and the role of private insurance, public programs, and employment-based insurance—of four general approaches that could achieve near-universal coverage by using premium subsidies and different forms of automatic coverage through a default plan. Those approaches are as follows:

• Approach 1. A multipayer system that retains existing sources of coverage while expanding eligibility for premium subsidies and providing partially subsidized default coverage through a private plan or a new public option.
• Approach 2. A multipayer system that retains employment-based coverage and replaces the current nongroup market and the acute care portions of Medicaid and the Children’s Health Insurance Program (CHIP) with a new public program that allows people to choose between partially subsidized private plans and a publicly administered plan that provides default coverage.
• Approach 3. A multipayer system that provides full subsidies for all people to purchase a private plan of their choice, with a default plan that provides automatic coverage to people who do not enroll in a plan on their own.
• Approach 4. A single-payer system that acts as a default plan for all people.

(For the first three approaches, see the full report at the link below.)

Approach 4: A Single-Payer System

Under a single-payer system, everyone in the defined population would receive health insurance coverage from the same public plan, and there generally would be no role for private insurance. There would be no premiums, and to achieve deficit neutrality, such a system would need to be financed through broad-based tax revenues; that is, new mechanisms of financing also would be required. This approach would involve the most significant departure from the current health care system, and it would be an enormously complex undertaking. Under current law, people receive coverage through various public and private sources, as described earlier in this report. Under a single-payer system, there generally would be no role for employment-based insurance, and the role of other public programs, such as Medicaid and Medicare, would be greatly reduced or eliminated.

Enrollment Process. Under a single-payer system, the government would strive to enroll all people in the defined population in the public plan. People also could be automatically enrolled at the time they were issued Social Security numbers, newborns could be enrolled in hospitals, and other eligible people could be enrolled at the time they sought medical care. Some people seeking medical care would not be eligible for enrollment—because they were visiting from another country, for instance—and the enrollment system would need to confirm that they were not eligible. Because people would need to provide information to the enrollment system and some would not do so, coverage would not be completely universal.

Premiums. There would be no premiums under a single-payer system. To achieve deficit neutrality, such a system would need to be financed through broad-based tax revenues.

Cost Sharing and Benefits. A single-payer system would have lower cost sharing than the average under current law. Such a system could include no cost sharing for most services. If the single-payer system included cost sharing, there could be exceptions for certain populations, such as people with low income, children, and the disabled.

The single-payer system would provide comprehensive major medical coverage, but certain items and services, such as over-the-counter medications and cosmetic procedures, could be excluded from coverage. Existing proposals cover a more comprehensive set of benefits than many current sources of coverage, including dental, vision, hearing, and long-term services and supports, but a single-payer system could be designed without those additional benefits.

Role of Private Plans. There generally would be no role, or a very limited role, for private insurance. If private insurance was allowed, it could be limited to services not covered by the public plan. However, private insurance also could be offered as an alternative source of coverage if enrollees and providers were allowed to opt out of the single-payer system. Alternatively, private insurance could provide benefit enhancements, such as faster access to care or private rooms instead of semiprivate rooms for inpatient stays, or it could be used to access providers that opt out of the single-payer system or to seek care abroad.

Role of Employment-Based Insurance. Employment-based insurance probably would no longer exist under a single-payer health system, or its role would be greatly reduced. For instance, it might provide supplemental coverage for services not covered by the public plan or reduce cost-sharing amounts, if any.

Role of Public Programs. Most public programs, such as Medicaid, CHIP, and Medicare probably would have a limited role or be eliminated under a single-payer system. Some components of those programs could continue to operate separately and provide benefits for services not covered by the single-payer health plan. For example, Medicaid and CHIP could continue to provide long-term services and support benefits only to low-income populations, but the Medicare program would no longer exist.

Examples of This Approach. The two versions of the Medicare for All Act of 2019 include many of the features described in this approach, including no premiums, comprehensive major medical coverage, limited to no cost sharing, and no private insurance that would duplicate the benefits of the single-payer system. (See the Medicare for All Act of 2019, H.R. 1384 and S. 1129, 116th Cong.)

https://www.cbo.gov…

Yarmuth letter requesting CBO study:
https://budget.house.gov…

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Hall v. Sebelius

Opinion written by Circuit Judge Brett Kavanaugh
667 F.3d 1293 (D.C.Cir.2012), No. 11–5076, February 7, 2012

This is not your typical lawsuit against the Government. Plaintiffs here have sued because they don’t want government benefits. They seek to disclaim their legal entitlement to Medicare Part A benefits for hospitalization costs. Plaintiffs want to disclaim their legal entitlement to Medicare Part A benefits because their private insurers limit coverage for patients who are entitled to Medicare Part A benefits. And plaintiffs would prefer to receive coverage from their private insurers rather than from the Government.

Plaintiffs’ lawsuit faces an insurmountable problem: Citizens who receive Social Security benefits and are 65 or older are automatically entitled under federal law to Medicare Part A benefits. To be sure, no one has to take the Medicare Part A benefits. But the benefits are available if you want them. There is no statutory avenue for those who are 65 or older and receiving Social Security benefits to disclaim their legal entitlement to Medicare Part A benefits. For that reason, the District Court granted summary judgment for the Government. We understand plaintiffs’ frustration with their insurance situation and appreciate their desire for better private insurance coverage. But based on the law, we affirm the judgment of the District Court.

https://casetext.com…

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Comment:

By Don McCanne, M.D.

House Budget Committee Chairman John Yarmuth and colleagues requested this CBO study on different policy approaches for achieving universal coverage, including “how each approach could provide coverage to individuals who do not otherwise actively enroll in private or public health coverage.”

Of the four approaches in the report, the first three are not discussed here for the following reasons: 1) Although they would expand coverage, none of them reach truly universal coverage, 2) All of them are multi-payer systems that include private insurance plans which have been the source of many of the dysfunctions in our current health care financing system, 3) All of them involve profound administrative complexity which has been a source of much of the waste in our current system, not to mention the grief that these excesses have caused, and 4) All of them would significantly increase the level of per capita spending on health care when we are already spending twice the average of other wealthy nations.

The fourth model should be familiar to advocates of single payer Medicare for All since it is based on the Medicare for All Act of 2019 sponsored by Bernie Sanders in the Senate and Pramila Jayapal in the House. It is summarized above, and more details can be found at the website of Physicians for a National Health Program at www.pnhp.org.

The CBO report says that, under this model, coverage would not be completely universal “because people would need to provide information to the enrollment system and some would not do so.” However, the program is designed to automatically include everyone for life. In fact, there is legal precedent for prohibiting individuals from disclaiming their legal entitlement to Medicare Part A. D.C. Circuit Court Judge Brett Kavanaugh wrote in an opinion that although individuals did not have to accept Medicare Part A benefits, they could not disclaim their legal entitlement to those benefits. So the government can require that everyone is covered.

At any rate, this report is important since the highly credible CBO has objectively described a single payer system in terms that make it clear that it is still the only model currently under consideration that would provide truly affordable health care coverage for absolutely everyone.

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