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Cutting Provider Pay 40% for Medicare for All Might Be Hard: Hearing Witnesses

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The House Rules Committee met Tuesday for the first congressional hearing ever on a Medicare for All bill — H.R. 1384, the Medicare for All Act of 2019 bill.

If passed and implemented as written, the bill would eliminate private health insurance, health insurance cost-sharing, long-term care insurance, dental insurance and vision insurance in the United States.

(Related: We Can Handle Medicare for All: Aflac)

Witnesses at the hearing spent much of their time talking about the impact of high health care costs on people’s lives.

Some of the witnesses talked about why shifting to a Medicare for All system might be more complicated than it sounds.

40% Provider Pay Cuts

Charles Blahous, a policy analyst who has served as an economics advisor to former President George W. Bush and other Republican leaders, talked about how a Medicare for All system might be financed, and how much it might really cost.

The United States now spends about $3.8 trillion per year on health care, and it could spend about $45 trillion on care, other than nursing home care, over the 10-year period from 2018 through 2027, according to national health expenditures  estimates from the Medicare Office of the Actuary.

Blahous says in his written testimony that, when he analyzed a 2018 Medicare for All bill that excluded coverage for nursing home care, he found that it could cost at least $32.6 trillion over the 10-year period from 2022 through 2031.

But the 10-year costs could be that low only if all health care providers accepted Medicare for reimbursement rates for all patients, Blahous says.

Traditional Medicare now pays providers about 40% less than private insurers do, and Medicare payment rates appear to be substantially below what providers need to get to break even, Blahous says.

If a new national health care system kept the current rules for paying providers and drugs in place, the Medicare for All system would probably cost at least $38.8 trillion over 10 years, or about $6.2 trillion more than with all care provided at Medicare reimbursement rates, Blahous estimates.

Sara Collins, a health care coverage analyst at the Commonwealth Fund, an organization seen as sympathetic to the Affordable Care Act, says in her written testimony that requiring all providers to take Medicare rates for all care would also make the economics of health care systems other than a Medicare for All system look better.

If, for example, all providers who treated patients with Affordable Care Act exchange plan coverage received Medicare-level payment rates, that could cut federal spending on ACA premium tax credit subsidies by $11.8 billion in 2020, and that could cut the enrollees’ own spending on ACA exchange coverage premiums by $1.7 billion, Collins estimates.

The federal government spent about $55 billion on ACA premium tax credits in 2018, according to analysts at the Henry J. Kaiser Family Foundation.

“Paying providers in commercial insurance plans at prices closer to those in Medicare or allowing the secretary of Health and Human Services to negotiate prescription drug prices have potential to slow health care cost growth and would not require an immediate shift to a single-payer system,” Collins says.

Collins says that some Medicare for All proposals include transitional period provisions that would add some policy changes, such as new restrictions on provider pay, but are less sweeping than shifting to a completely government-run health care finance system.

(Related: 7 Ideas From Bernie Sanders’ Transitional Health Insurance Proposal)

“On the other hand, moving piecemeal also involves tradeoffs including the possibility, based on the experience of the ACA, that additional steps may take some time to achieve,” Collins says.

Pelosi’s Issue

The House Rules Committee comes directly under the authority of the House speaker. It usually packages bills from other House committees for votes on the House floor. It rarely originates bills of its own.

But House Speaker Nancy Pelosi showed her interest in H.R. 1384, which was introduced by Rep. Pramila Jayapal, D-Wash., by having ”her committee” hold an original jurisdiction hearing on the bill.

The original jurisdiction hearing was the first the committee has organized in about three years.

What House Rules Leaders Said

Rep. Jim McGovern, D-Mass., the House Rules chairman, said a debate on Medicare for All is necessary because 29 million Americans still lack health coverage, and 44 million Americans with coverage are underinsured.

“After nearly a decade of Republicans talking only about how to rip health care away from people, this majority is here to discuss how to expand it, how to lower the cost, and how to improve outcomes,” McGovern said.

Rep. Tom Cole, R-Okla., scoffed at the idea of House Rules being the home committee for H.R. 1384.

House Rules actually has original jurisdiction over just one of the bill’s 120 pages, Cole said.

Cole predicted that implementing H.R. 1384 would hurt the finances of the current Medicare program, lead to longer wait times for care, and reduce the quality of care.

“Medicare for All really means Medicare for none,” Cole said.

But Cole acknowledged the emotional nature of the Medicare for All debate by beginning his remarks with a warm welcome for all of the witnesses, including the witnesses who spoke in support of H.R. 1384.

“There’s a variety of perspectives, as there should be, amongst our witnesses today,” Cole said. “But each and every one of them is interested in the best possible health care for the American people. It’s a noble and worthy goal.”


Links to information about the H.R. 1384 hearing, including a video recording of the hearing, are available here.

— Read We’re the Ones Actually Improving Health Care: UnitedHealthon ThinkAdvisor.

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© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.