Joe Biden can now tell voters he wants to fix the health care system without blowing up what works.
Biden, the front-runner among Democratic presidential candidates, unveiled a health care plan on July 15 that would keep private insurance in place and offer Americans a new “public option” if they wanted it. It’s a repudiation of the “Medicare for all” plan favored by Elizabeth Warren, Bernie Sanders and others, which would end employer-provided coverage and force everybody into a government plan.
Biden’s plan would let anybody buy into a new public plan, similar to Medicare, with subsidies for lower-income people. It would also tweak the Affordable Care Act by offering new financial assistance for families who earn too much to qualify for aid under the current program. But if both programs were in place, the new public option might eventually become more appealing and subsume the ACA.
Biden’s plan would also let the government negotiate drug prices with pharmaceutical firms, a move Big Pharma has managed to forestall through adept lobbying. Overall, the Biden health care plan would cost about $75 billion per year, which Biden would pay for by repealing some of the Trump tax cuts for high earners and raising the capital-gains tax rate.
Democrats would probably have to control both houses of Congress for Biden’s plan to have a prayer of becoming law. But the Biden plan is more realistic than Medicare for all, which would move 150 million people out of employer-provided plans most enrollees like, and force them into a government plan. If Biden ends up as the Democratic nominee, his health care plan could provide a big advantage over President Donald Trump—who doesn’t have a health care plan.
Trump’s main campaign promise on health care was to repeal the ACA, which Congress failed to do even when Republicans controlled both houses. The Trump administration is party to a high-stakes lawsuit that would invalidate the entire ACA, which could be a curse for Trump if it succeeds. Killing the ACA would throw the health care system into chaos and once again allow insurance companies to deny coverage, or charge more, for people with preexisting conditions—one of the most hated practices in the health care industry, before the ACA banned it.
No serious health care plan from the GOP
Trump will probably roll out some kind of health care plan before the election, but his record so far is thinner than a hairline fracture. Trump has allowed a new form of short-term health plan, to provide modest coverage for people who don’t want to pay for a lavish plan. But there’s no sign that has reduced the number of uninsured or saved anybody any money.
Last week, a judge struck down a Trump rule that would have required pharmaceutical companies to advertise drug prices when they run televised ads. And the Trump administration abandoned another plan to curb behind-the-scenes rebates that tend to push consumer prices up. Even if those measures had gone into effect, health care economists didn’t expect much impact on drug prices.
Health care is a desert for the entire Republican party, which has been trying to repeal the ACA since it went into effect in 2010. Aside from that effort, there’s no serious GOP plan for lowering costs, improving outcomes or expanding care to the 27 million Americans who still don’t have coverage.
Nearly all of the 20-something Democrats running for president have a health care plan, which reflects the importance Dems place on the issue. Voters consistently rate health care costs and availability as one of their top three concerns.
Dems have been arguing among themselves, however, when it comes to what type of plan would be best. Biden’s plan would leave in place what is more or less working, which is coverage offered by large companies that have the power to negotiate good deals with insurers and providers. Smaller companies have a harder time doing that, and businesses with fewer than 50 employees aren’t required to offer coverage at all. Biden’s plan would let workers at such companies join the public option, if it offered a better deal.
Biden’s plan probably would weaken the employer-based system over time, since it would let people opt out and join the public program. With fewer people in the employer-based system, purchasing power would decline and insurance might get more costly than it otherwise would, leading even more people to leave the private system and join the public one. In that regard, the Biden plan could be a gateway to single-payer care down the road, with most Americans covered by a government plan. Biden won’t mention that. But Trump might.
Rick Newman is the author of four books, including “Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman