Heading into next month’s virtual convention, Joe Biden must unite the Democratic Party on the issue of health care reform. Toward this goal, Biden’s Unity Task Force with Sen. Bernie Sanders (I-Vt.) recently advanced a high-level health care strategy. The cornerstone of efforts toward universal coverage is a public option based on Medicare that any individual could choose. This idea no doubt would improve on the status quo. But extending it even further to employers, allowing them to select a public option as their employee health plan, could have a greater impact on coverage and offer a stronger unifying position as a possible step toward “Medicare for All.”
In the Democratic primary debates, Biden proposed building on the Affordable Care Act (ACA) with a public option primarily aimed at individuals and available on the ACA marketplaces, an approach sometimes denominated “Medicare for All Who Want It.” While this route comes with a more palatable price tag than Medicare for All, it offers less reach and impact.
The Unity Task Force recommendation incorporates this basic approach of a public option for individuals, with the twist of explicitly allowing an individual to opt out of an employer plan and into the public option: “Everyone will be eligible to choose the public option …, even those who currently get insurance through their employers.”
This recommendation is a step forward, but it misses an opportunity to make more transformative progress by failing to target the decision-makers who could make a real difference: employers. A public option for employers has been contemplated in Medicare for All transition plans and in proposed legislation, such as Medicare for America and the Choose Medicare Act, and would offer substantial advantages over one aimed primarily at individuals.
To begin with, employers are much better equipped to evaluate the relative value of health plans, while taking into account their employees’ needs and preferences. Individuals, in contrast, struggle to navigate health plan options. The Unity Task Force favors a public option because private insurers “need real competition,” but competition works best when consumers understand their choices. Corporate human relations departments can better navigate alternatives.
An employer public option would likely enroll many more participants than one primarily for individuals. If just a small number of major employers elected to participate, hundreds of thousands of households would transition to the public option, providing a meaningful opportunity to test the feasibility of expanding Medicare and to allow refinement over time.
Critically, there would be no mandatory change in employer health care plans, which was a stumbling block for Medicare for All in the Democratic primaries. Participation would be up to employers, like the choice companies face today when they decide whether to ship goods with the U.S. Postal System or Federal Express. Individuals almost certainly would be more receptive to a public option if selected and offered by their employers.
Employers may well jump at the option of a compelling public alternative. Employers now must manage health care costs that outpace inflation and devote huge amounts of time and resources to designing and maintaining health plans in a highly regulated and complex legal environment. A well-designed public option could eliminate or greatly reduce these burdens, which employers might welcome if their employees were guaranteed high-quality insurance provided by the federal government. It also could slow increases in medical care costs.
Compared to Medicare for All, a voluntary, employer-focused public option would carry a much lower price tag for the federal government. Current employer and employee contributions to employer-sponsored health insurance could be retained — in whole or in part — to finance an employer-based public option. Indeed, if cost savings of moving employees onto a public option are as substantial as anticipated, it could be a boon for employers and employees. These savings should translate into wage growth and increased employment.
Finally, workers enrolled in a public option plan would fare much better in the face of future economic downturns, such as the one we are now facing with close to 30 million individuals who may be left uninsured after having lost their job-based health insurance as of early May. Rather than falling out of private insurance coverage as they do today, unemployed workers covered by a public option could easily and seamlessly retain their health care coverage.
A public option for employers would offer Biden a unifying and more transformative plank for his health care agenda.
Allison K. Hoffman is a professor of law at University of Pennsylvania Carey Law School, Howell E. Jackson is James S. Reid, Jr., Professor of Law at Harvard Law School, and Amy B. Monahan is Distinguished McKnight University Professor at University of Minnesota Law School.