Biden’s health plan falls short — here’s how to fix that

The coronavirus crisis is shining more light on why health care remains a top financial and political issue for Americans. Millions of Americans are losing health coverage and many COVID-19 patients, including those with insurance, will be left with high medical bills. While President Trump has a miserable record on health coverage, the crisis puts into sharper relief the question of how much Joe Biden’s proposals would make health care affordable and reduce the number of uninsured. 

A new analysis I just did of former Vice President Joe Biden’s public option plan reveals that it would do far too little to lower high health care costs for Americans or lower the number of uninsured. That doesn’t mean Biden needs to support single-payer “Medicare for All.” Instead, he should back a robust public option plan, like one now in Congress, that delivers on lowers costs and universal coverage. 

Biden touts his plan as protecting and building on the Affordable Care Act, which was designed principally to make health care more affordable for people without any insurance. That ignores half of Americans — 157 million people — who get health coverage through an employer. But over the past decade, the average employer plan deductible doubled. The combined cost of premiums and deductibles for middle-income workers is taking a bigger share of income than ever before. Employer coverage does not mean affordable coverage. 

However, under Biden’s plan, only lower-paid workers who earn under $25,000 would see big savings on premiums and out-of-pocket costs by switching to the new public option. That’s one-out-of-eight million of those who get health insurance at work, about 19 million people. 

The other 136 million people who get coverage at work would not likely have lower health care costs, because of Biden’s public option has higher out-of-pocket costs than the typical employer plans that cover 80 percent of workers. 

Biden’s plan, which includes improvements to the Affordable Care Act (ACA), would lower costs for some people who now buy private insurance or who are uninsured. That includes lower out-of-pocket costs for 14 million people who earn more than $25,000. It would also offer lower premiums and out-of-pocket costs for about eight people who earn more than $50,000. However, the-out-of-pocket costs for all of these 22 million people would still be higher than in a typical employer plan.

There are two groups of people who are now uninsured who would be likely to get coverage under Biden’s plan. The first is the 4.8 million people who live in a state that did not expand Medicaid under the ACA. They will be able to enroll in the public option with no or very low premiums and co-payments. The second is about one million uninsured people between the age of 60-64 who, in a recent proposal, Biden would make newly eligible for Medicare. 

In making these estimates I’ve left out one way that a public option may lower health care costs: using its purchasing power to lower what it pays for the health services it purchases. However, it’s very unlikely that it would have enough market clout as this analysis shows it would at best enroll half the number of people covered today by the biggest health insurance companies. 

To sum this up, of the 204 million Americans who are now too young for Medicare, Biden can assert that some 46 million people will save on health care costs under his plan. However, 21 million of these will still have higher spending than in the typical employer plan. And among the 23 million Americans who are now uninsured (that leaves out 5 million immigrants who are not eligible for any of these provisions), only about one-out-of-four would likely to be newly insured.   

By contrast, Sen. Bernie Sanders’ (I-Vt.) Medicare for All plan would dramatically lower health care spending for all but the wealthiest Americans and achieve universal coverage. Still, to get those savings people would have to give up their employer-sponsored or other private coverage, which sinks its appeal for a majority of Americans. 

Those don’t have to be the only two choices. it is very possible to have a Medicare-based public option plan that delivers on lower premiums and cost-sharing for almost everyone. For example, the Medicare for America Act, introduced by Reps. Rosa DeLauro (D- Conn.) and Jan Schakowsky (D-Ill.), would set up a public insurance option through Medicare that would deliver much more affordable health care, including no deductibles and coverage for dental, hearing and vision. The plan would achieve universal coverage, be open to anyone and would incorporate the ACA and other individual coverage, Medicaid, CHIP and people who work for small employers. But their legislation would allow people who work for large employers to keep their coverage if they chose to.  

The COVID crisis has exposed the lie that the “booming” economy provided financial security to most Americans. The dire straits facing so many people create a greater opportunity for Biden to seriously address the enormous financial pressures — the costs of health care, childcare, college, credit card debt, stagnant wages — that so many families face. In doing so, he will unite the Democratic party. But more than that, he would propose an agenda for a presidency that would meet the huge economic and political inequalities that are the historic challenge of our times.  

Richard Kirsch is the director of Our Story: The Hub for American Narratives and the author of “Fighting for Our Health: The Epic Battle to Make Health Care a Right in the United States.”