How might 'Berniecare' work?

Sen. Bernie Sanders, a Vermont independent who is running for the Democratic presidential nomination, has something in common with Sen. Ted Cruz, a contender for the Republican nomination: He’s introduced legislation that would repeal the health insurance sections of the Patient Protection and Affordable Care Act (PPACA).

Unlike S. 339 — the ObamaCare Repeal Act bill, a bill that Cruz introduced earlier this year  — Sanders’ major health care system change bills would also kill the State Children’s Health Insurance Program (SCHIP); the TriCare program for military dependents and veterans; the provisions of the Social Security Act that created Medicare and Medicaid; and the health insurance provisions in the Employee Retirement Income Security Act of 1974 and the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

Sanders recently made headlines by unveiling a brief summary of his current proposal for creating what he says would be a “federally administered single-payer health care program.”

See also: Sanders releases ‘Medicare for all’ health plan

The bills he has introduced in the Senate give a more comprehensive look at his ideas for reshaping the U.S. health care system. He has offered several versions of a sweeping American Health Security Act (AHSA) bill. He introduced the latest version, S. 1782, in December 2013, as the first PPACA health insurance open enrollment period was already under way.

Many refer to PPACA as “Obamacare,” even though members of Congress wrote and amended the bill that became PPACA.

Sanders’ AHSA bills and his new single-payer health care proposal summary appear to reflect Sanders’ own thinking.

For a look at some of the “Berniecare” details that might interest insurance professionals, read on.

1. The Berniecare proposals would create a big single-payer health insurance gorilla.

In addition to putting the people who are now in Medicare, Medicaid, TriCare, SCHIP plans and commercial health insurance plans in the new AHSA plan system, Berniecare would create a new long-term care benefits (LTCI) program that would pay both for facility-based care and home health care.

The Berniecare proposals would ban “balance billing,” or the practice of charging patients for the difference between what a care provider wants to bill and what a plan wants to pay. In the Berniecare system, providers who wanted to treat patients would have to accept the amounts the AHSA plans wanted to pay.

S. 1782 does not appear to intentionally, explicitly prohibit care providers from providing services outside the Berniecare system, but the provision banning balancing billing states that, “No person may impose a charge for covered services for which benefits are provided under this act.” A strict reading of that provision might prohibit a provider from providing any services covered by AHSA plans outside of the AHSA plan framework.

In a “no duplicate health insurance” provision, Sanders seeks to prohibit any public or private insurer from selling insurance that would compete with the AHSA plans.

“State health security program shall prohibit the sale of health insurance in the state if payment under the insurance duplicates payment for any items or services for which payment may be made under such a program,” according to the text of the provision.

But the Berniecare proposals explicitly give a state program, an employer-sponsored plan or a union plan the ability to provide supplemental benefits. They are silent on the subject of the sale of other types of supplemental health benefits, such as hospital indemnity insurance policies or critical illness insurance policies.

See also: Doctors’ strike suspended in England amid progress in talks

2. A state health security program would run each state’s health program.

A state could team up with other states to form a regional health security planning consortium.

A state or regional health security entity would have to submit its health care services plan to the American Health Security Standards Board (AHSSB).

Just as the U.S. Department of Health and Human Services (HHS) now takes over running PPACA programs in states that are unable or unwilling to meet HHS PPACA implementation standards, the AHSSB would take over in states that failed to meet the AHSA standards.

See also: Nebraska: Non-exchange states have choices to make 

3. Sanders does not say anything about how the entities in charge of administering the AHSA plans would operate.

Today, the federal government does not actually administer the day-to-day operations of the traditional Medicare program. It hires large contractors to do that. Some of the contractors are business support services companies, and some are large health insurers.

In the AHSA bills and the new Medicare-for-all summary, Sanders does not say who would pay provider claims. His Berniecare proposals imply that private providers would continue to exist, and that providers would continue to be subject to current federal bans on fraud and abuse.