Delaney v. Sanders: Will Medicare for All Kill the Hospitals?

Democratic presidential contenders are continuing to use Bernie Sanders’ Medicare for All single-payer health care proposal as a tool for figuring out what they really think about U.S. health finance policy.

The candidates returned to talking about Sanders’ Medicare for All bill repeatedly on Tuesday, in Detroit, during the first night of the Democratic candidates’ second two-night debate, which was aired live by CNN.

Sanders has proposed having the government set up a public health finance system that would pay for all medical care, dental care, medically necessary vision care and long-term care. His Medicare for all All bill would prohibit private companies from duplicating any form of coverage that the government plan provides.

Sanders, an independent senator from Vermont, rejected the idea that taking private health insurance away from U.S. residents would be a problem.”

“Right now, we have a dysfunctional health care system,” Sanders said, according to a transcript posted the Rev.com transcription service.

People are dying while the health care industry makes of tens of billions of dollars in profits, Sanders said.

Meanwhile, Sanders said, Canada already guarantees health care for every man, woman and child.

“They spend half of what we spend,” Sanders said. “And, by the way, when you end up in a hospital in Canada, you come out with no bill at all.”

Sanders said his single-payer health care system — which would ban all deductibles, co-payments, coinsurance amounts and other forms of cost-sharing, but would hold provider reimbursement rates of around the current Medicare reimbursement rate level — would be sustainable because health care providers would spend so much less on billing and other administrative work.

John Delaney’s Critique

John Delaney — a Democrat who represented Maryland in the U.S. House from 2012 to 2018, and who started and ran the Health Care Financial Partners health care finance company from 1993 through 1996 — argued that supporting Sanders’ Medicare for All proposal, and ban on private health insurance, would make the Democratic party “the party of subtraction.”

Democrats would be “telling half the country, who has private health insurance, that their health insurance is illegal,” Delaney said.

Delaney said his own father was union electrician who loved the health coverage he got from the International Brotherhood of Electrical Workers.

“He would never want someone to take that away,” Delaney said.

Many current Medicare beneficiaries actually have Medicare Advantage coverage, which is private health insurance, Delaney added.

Delaney said he believes another problem with Sanders’ plan is that requiring all providers to take Medicare reimbursement rates would be unsustainable, because Medicare reimbursement rates are too low to keep hospitals and other providers in business.

Medicare reimbursement rates now amount to only about 80% of a hospital’s actual cost of delivering care, Delaney said.

“Private insurance covers 120%,” Delaney said. “So, if you start underpaying all the health care providers, you’re going to create a two-tier market where wealthy people buy their health care with cash and the people who are forced, like my dad, the union electrician, will have that health care plan taken away from him.”

Sanders’ Counterattack

Delaney said of Sanders’ proposal, “I’ve done the math. It doesn’t add up.”

Sanders said, “Maybe you did that and made money off of health care, but our job is for a nonprofit health care system.”

Sanders insisted that by eliminating about $500 billion per year in spending related to the complexity of having to deal with health insurance, hospitals will be better off than they are today.

Elizabeth Warren, a Democratic senator from Massachusetts, also talked about the value of eliminating private health insurance.

“We have tried this experiment with the insurance companies, and what they’ve done is they’ve sucked billions of dollars out of our health care system, and they force people to have to fight to try to get the health care coverage that their doctors and nurses say that they need,” Warren said. “Why does every hospital have to fill out so many complicated forms? It’s because it gives insurance companies a chance to say no and to push that cost back on the patients. That’s what we have to fight.”

Alternatives

Several candidates at the debate, including Pete Buttigieg, Tim Ryan and Amy Klobuchar, said creating a government-run public option plan, or optional alternative to private health insurance, would be better than banning the sale of private health insurance.

Buttigieg, the Democratic mayor of South Bend, Indiana, said policymakers can let ordinary people decide for themselves whether a public option is better or a corporate option is better, by making both available.

“If people like me are right that the public alternative is going to be not only more comprehensive but more affordable than any of the corporate options around there, we’ll see Americans walk away from the corporate options into that Medicare option and it will become Medicare for All without us having to kick anybody off,” Buttigieg said.

Klobuchar, a Democratic senator from Minnesota, said creating a public option would be easier and faster than trying to create a Medicare for All system.

“I want to get things done,” Klobuchar said. “People can’t wait.”

Tim Ryan, a Democrat who represents Ohio in the House, said letting people buy into the current Medicare program would be much better than eliminating workers’ group health coverage.

Ryan said he represents many members of unions.

“These union members are losing their jobs,” Ryan said. “Their wages have been stagnating. The world is crumbling around them. The only thing they have is possibly really good health care, and the Democratic message is going to be, ‘We’re going to go in, and the only thing you have left, we’re going to take it and we’re going to do better.’ I do not think that’s a recipe for success for us.”

— Read Democrats Fret Over ‘Medicare for All’ Backlash, on ThinkAdvisor.

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