Destroying Medicare to Save Obamacare: Hillary's Public Option Plan

http://www.nakedcapitalism.com/2016/05/destroying-medicare-to-save-obamacare-hillary-clintons-public-option-plan.html

“The narrative” is that Sanders is pulling Clinton left, and one example is Clinton coming out in favor of a “public option” for Medicare. Unfortunately for the narrators, Clinton’s proposal is insultingly unserious, the “public option” has always been a defense against single payer rather than a step towards it, the Democrat nomenklatura remains as implacably opposed to single payer as it has ever been, and, most important of all, the “public option” — as a neo-liberal, market-based solution — could have a significant negative impact on Medicare. In other words, Clinton’s attempt to save ObamaCare politically by supporting a “public option” is — to mix metaphors terribly — a poisoned chalice for the health care system, and not an olive branch to the left. Let’s get the narrative out of the way first, and then treat the rest of these topics in order

“The Narrative” on Clinton’s “Public Option” Proposal

Unsurprisingly, the Times headline tells the story as the Democrat Establishment would like it to be told. In re-emphasizing her support for the public option:

Hillary Clinton Takes a Step to the Left on Health Care

Pete Petersen’s Fiscal Times agrees:

Clinton made those comments after coming under mounting pressure on health care reform not only from Sanders, her long-shot rival for the Democratic nomination, but also from some Democratic members of Congress, rank and file Democrats and health care professionals who say she should be more open to changes to address major shortcomings in Obamacare

Bloomberg had broken the story earlier:

At a campaign stop Monday in Northern Virginia, Hillary Clinton reiterated her support for a government-run health plan in the insurance market, possibly by letting let Americans buy into Medicare, to stem the rise of health-care costs.

(Note the fundamentally neoliberal mindset: The state is, as it were, (1) inside the market, instead of (2) the market being inside the state. But if you want “the rule of law,” for example in contract enforcement, you should choose Door #2. Otherwise, the rule of law is for sale, which is more or less what we see in today’s orgy of corruption and looting, supported by official Washington on a thoroughly bipartisan basis.) Bloomberg continues:

“I’m also in favor of what’s called the public option, so that people can buy into Medicare at a certain age,” the Democratic presidential front-runner said during a roundtable with local residents at the Mug’N Muffin coffee shop. “Which will take a lot of pressure off the costs.”

Wow. When Clinton said she wasn’t a “natural polititican,” she wasn’t kidding, was she? Heaven forfend that we should have an inclusive health care system that seeks to alleviate suffering “for all.” No, “the costs” is the issue Clinton latches onto. (Of course, if you think “cost” is a good faith reason to support neo-liberal solutions like ObamaCare, you have to deny the existence of a “Medicare for All” system that treats everyone, with equal or better outcomes, at much lower cost, say sixty miles north of Burlington, Vermont.)

For good measure, Bloomberg does some Pravda-like rewriting of history:

The idea of a government-run insurance option long has been favored by the liberal wing of the Democratic Party, but it was stripped from the final version of Obamacare legislation in the face of firm opposition by Republicans and the insurance industry.

snip

Clinton’s Proposal Is Insultingly Unserious

“The narrative” on Clinton’s wonkiness is summed up well in this headline from WaPo:

Clinton’s wonky policies of fine-grained complexity contrast with rivals’ grandiose ideas

(How true. It is known that grandiosity is central to the Canadian identity.) And WaPo expands:

To her, complexity is realism.

Clinton says she simply can’t make the simple, grand promises of her rivals — free college tuition, a big, beautiful, free wall. Instead, she skips ahead to what policy looks like the way it’s actually been done: complicated, ugly and in small steps… Clinton treats policymaking like watchmaking — a lot of whirring, tiny, hidden gears

Naturally, I began by looking eagerly for those tiny little gears at the Clinton campaign website in the health care section. If you want to give them the hits, you’ll see that the public option is completely undefined (not surprisingly, to those who know the history, which we’ll get to). So we’ll have to rely on news reports. We’ll see that Clinton’s “plan” for the “public option” ignores the following key implementation issues: (1) The platform; (2) the age cut-off; (3) the income cut-off; (4) subsidies; and (5) coverage. We’ll also see (6) that the “public option” is another tax on time, increasing complexity without necessarily adding value.

(1) The platform. Bloomberg:

While Clinton long has supported including a public option in the insurance market, her campaign said she was floating the idea of letting Americans not yet of retirement age buy into the Medicare system as one way of accomplishing that. She’s also open to creating a separate government-run option on the Obamacare exchanges.

“Open to” is a nice way of saying “hasn’t decided whether” (assuming good faith) or “is concealing the decision to” (being more realistic). If you’ve invested hours of your time fighting through an ObamaCare exchange — as Clinton’s base constituency of credentialed professionals generally does not — this matters to you.

(2) The age cut-off. Fortune:

While she didn’t specify what the age cutoff might be, the implication was that the expansion would be available for those who are at least 50 or 55 years old.

Ah. “The implication.” The actual age is important, since Medicaid estate recovery (see below) kicks in at 55.

(3) The income cut-off. Bloomberg:

She was responding to a question from a resident who complained that she’s just above the cutoff level to enjoy subsidies on the Obamacare exchanges.

“There’s just a cutoff, instead of what I’d like to see which is a kind of gradual diminishment. People shouldn’t just—once they get to a certain income level shouldn’t lose all their benefits,” Clinton said. “That’s something I’m looking at.”

Lots of little cut-offs are still cut-offs, and will present the same ethical dilemmas that the current system does: That is, people on the bubble are incentivized to lie, depending on which side of the cut-off they want to end up on, as are their advisors, if any.

(4) Subsidies. The Times:

Mrs. Clinton did not say, for example, whether lower-income Americans choosing Medicare [through the buy-in] would receive help paying their premiums, as they do when they buy private plans on the new marketplaces in the Affordable Care Act. Without such subsidies, Medicare might be an affordable option only for wealthy or very sick customers.

(It’s not clear to me why being “very sick” makes Medicare more “affordable.” Did I not get the memo?)

(5) Coverage. Don McCann from PNHP:

[W]ithout additional coverage such as [neo-liberal infestations like] Medigap plans, the traditional Medicare program leaves individuals potentially exposed to significant costs. It does not even have a catastrophic cap on coverage. Would an individual opting for a Medicare buy-in need to also purchase a Medigap plan? Or would a special Medicare plan be offered that included those benefits?

(6) Tax on time. Avalere Consulting once more:

While Medicare is widely popular among Americans, Avalere experts say it is not immediately evident that Medicare coverage would be a better option for all people over 50 [assuming that to be the cut-off]. Specifically, when compared to products sold through insurance exchanges, the analysts note that traditional, fee-for-service Medicare tends to offer a broader network of providers and lower deductibles relative to unsubsidized exchange products. However, because of the unusual structure of the Medicare fee-for-service program, consumers enrolling in the program may have higher costs and more benefit limits than exchange products.

So, the “public option” is yet another tax on time, that won’t necessarily yield a benefit if consumers citizens trapped in the maze of options make a wrong choice.