Medicare-for-all: Rep. Pramila Jayapal’s new bill, explained

Rep. Pramila Jayapal (D-WA) is introducing the most ambitious Medicare-for-all plan yet — one that envisions a quick transition to a public health plan with a robust set of benefits.

The co-chair of the Progressive Caucus is releasing a proposal Wednesday to transition the United States to a single-payer health care system, one in which a single, government-run health plan provides insurance coverage to all Americans.

“We mean a complete transformation of our health care system and we mean a system where there are no private insurance companies that provide these core benefits,” Jayapal told reporters Tuesday. “We mean universal care, everybody in, nobody out.”

Jayapal’s bill envisions a future where all Americans have health coverage and pay nothing out of pocket when they visit the doctor or hospital. Her plan, the Medicare for All Act of 2019, describes a benefit package that is more generous than what other single-payer countries, like England or Canada, currently offer. The benefits in Jayapal’s bill are even more generous than those included in Sen. Bernie Sanders (I-VT) Medicare-for-all plan.

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But where the Jayapal plan has great detail into what is covered, it does not get into a crucial question: how the government will pay for the new health care program.

The new proposal comes at a moment that Democrats are coalescing around a Medicare-for-all platform. Frontrunner candidates in the Democratic primary like Sens. Kamala Harris (D-CA), Cory Booker (D-NJ), and Elizabeth Warren (D-MA) have all signed on as co-sponsors to Sanders’s single-payer bill in the Senate.

The health care industry has already begun to gird for a major health care fight should a Democrat win in 2020, recently launching a new coalition of hospitals, insurers, and drugmakers to oppose the Medicare-for-all agenda. Jayapal says she’s ready: She’s already secured a promise from House Speaker Nancy Pelosi to hold the first-ever House hearings on Medicare-for-all later this year.

“We will be pushing it as hard as we can and as fast as we can,” Jayapal says. “Enough nibbling around the edges. We really need to transform the system.”

Jayapal’s Medicare-for-all plan has a very generous benefit package — and a quick transition to government-run health care

Jayapal’s single-payer proposal would create a universal Medicare program that covers all American residents in one government-run health plan.

It would bar employers from offering separate plans that compete with this new, government-run option. It would sunset Medicare and Medicaid, transitioning their enrollees into the new universal plan. It would, however, allow two existing health systems to continue to operate as they do now: the Veterans Affairs health system and the Indian Health Services.

Those who do qualify for the new universal Medicare plan would transition into the program over the course of two years. This would start with people under 19 and over 55 moving into the program one year after it became law — and everyone else one year after that.

It’s worth noting that this is actually a faster transition than what Sen. Sanders envisions in his proposal, which would give the United States four years to stand up to a government-run plan.

Eventually, though, everyone would all end up in the same plan, which includes an especially robust set of benefits. It would cover hospital visits, primary care, medical devices, lab services, maternity care, and prescription drugs, as well as vision and dental benefits. Jayapal’s bill would cover abortion services, as does the newest version of Sanders’s plan.

Jayapal’s plan also includes coverage for long-term care services for nursing services. The current Medicare program does not include this benefit, nor does Sanders’s single-payer plan in the Senate. That would make the health care system she envisions more generous than the one Sanders has proposed, but also more expensive.

The plan is also significantly more generous than the single-payer plans run by America’s peer countries. The Canadian health care system, for example, does not cover vision or dental care, prescription drugs, rehabilitative services, or home health services. Instead, two-thirds of Canadians take out private insurance policies to cover these benefits. The Netherlands has a similar set of benefits (it also excludes dental and vision care), as does Australia.

What’s more, the Jayapal plan does not require consumers pay any out-of-pocket spending on health aside from prescription drugs. This means there would be no charge when you go to the doctor, no copayments when you visit the emergency room. All those services would be covered fully by the universal Medicare plan.

This too is not in line with international single-payer systems, which often require some payment for seeking most services. Taiwan’s single-payer system charges patients when they visit the doctor or the hospital (although it includes an exemption for low-income patients). In Australia, people pay 15 percent of the cost of their visit with any specialty doctor.

The Sanders plan is more generous than the plans Americans currently receive at work too. Most employer-sponsored plans last year had a deductible of more than $1,000. It is more generous than the current Medicare program, which covers Americans over 65 and has seniors pay 20 percent of their doctor visit costs even after they meet their deductibles.

Medicare, employer coverage, and other countries’ plans show that nearly every insurance scheme we’re familiar with covers a smaller set of benefits with more out-of-pocket spending on the part of citizens. Private insurance typically pops up to fill in these gaps — or to allow citizens to buy faster access to services that the government plan does cover (for example, to jump to the front of the line for an elective surgery).

The reason our peer countries went this way is clear: It’s cheaper to run a health plan with fewer benefits. The plans that both Jayapal and Sanders have proposed have no analogue among the single-payer systems that currently exist. By covering a more comprehensive set of benefits and asking no cost sharing of enrollees, it is likely to cost the government significantly more than programs other countries have adopted.

The big question Jayapal doesn’t answer: How do you pay for it?

The Jayapal plan goes into great detail on what kind of coverage a universal plan ought to offer. But it does not do any work explaining how to pay for such a generous benefit package.

Jayapal says that this is an issue that will get dealt with in the future. “Most bills don’t have that when they’re introduced, that comes later in the process,” she said of a financing plan. “I actually think the question is not about how we pay for it, the question is where is the will to make sure every American has the health care they deserve and have a right.”

Jayapal mentioned a wealth tax or repeal of Republican tax cuts as possible options for paying for the system.

Financing the health care system that both Jayapal envisions is an immense challenge. About half of the countries that attempt to build single-payer systems fail. That’s Harvard health economist William Hsiao’s estimate after working with about 10 governments in the past two decades. Whether he is in Taiwan, Cyprus, or Vermont, the process is roughly the same: Meet with legislators, draw up a plan, write legislation. Only half of those bills actually become law. The part where it collapses is, inevitably, when the country has to pay for it.

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This is what happened when Sanders’s Vermont attempted to create a single-payer plan in 2014. Much like Jayapal, local legislators outlined a clear vision of the type of health plan they’d want to extend to all Vermonters. Their plan was arguably less ambitious; it did require co-pays when patients went to the doctor.

But Vermont’s single-payer dream fell apart when the state figured out how much it would need to raise taxes to finance its new system. Vermont abandoned the government-run plan after finding it would need to increase payroll taxes by 11.5 percent and income tax by 9 percent.

It’s true — in Vermont and in the United States — that these increased taxes don’t necessarily mean overall health spending is rising. It’s entirely possible that health spending will go down as taxes go up, with Americans no longer spending billions on premiums for employer-sponsored coverage.

Single-payer systems change who pays for health care, often shifting more of the burden onto wealthier individuals to create a more progressive system. The proposed 9 percent income tax in Vermont, for example, would be far more expensive for the $100,000 worker than the $30,000 earner.

But who pays how much more is a key question this Jayapal bill doesn’t answer. Until there is a version that does, we can’t know whether the health system the Vermont senator envisions could actually become reality.

Zach Gibson/Getty Images

Dylan Scott contributed reporting to this article.

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