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Healthcare Already Taking Center Stage in 2020 Democratic Primary Race

With Massachusetts senator Elizabeth Warren (D-MA) announcing that she was forming a Presidential exploratory committee, I suppose that means the 2020 Democratic Primary is off to the races. Joining her are some lower profile candidates, including John Delaney (former MD congressman), Richard Ojeda (WV state senator and former congressional candidate), Tulsi Gabbard (HI congresswoman), Julian Castro (former secretary of HUD). And within the last week, senators Kirsten Gillibrand (D-NY) and Kamala Harris (D-CA) put their hats in the ring.

While many issues are likely to play prominent roles in this campaign — immigration, taxes, inequality, housing, universal pre-k, college affordability, environment/climate change — healthcare is likely to play an outsized role after Democrats found it to be a winning issue in 2018. 

Candidates and potential candidates will try to differentiate themselves on these issues (though interestingly it appears that all candidates support Medicare for all). While federal legislation may be limited at the moment, there have been a flurry of initiatives at the state level, which may gain a wider platform in presidential primary, I wanted to highlight some of rhetoric and proposals that have been floating around.

Expanding Access – Medicaid Buy-in or other forms of the “Public Option”

Several states are considering offering an option for folks to buy-in to their state Medicaid program, essentially providing a public option that was famously excluded from the ACA. These proposals are the state-level parallels to the federal-level Medicare for All (M4A) or Medicare buy-in ideas. Of course, given that Medicaid, a federal-state program that administered by the states meant for low-income families, has unique features that may not work when translating to a more wealthy population, and many details remain to be worked out.

First, are these plans going to be identical to traditional Medicaid, with the same reimbursement scheme (typically far less than private insurers or Medicare), provider network (varies significantly state-by-state, but there are doctors and hospital systems who do not accept Medicaid), and cost-sharing structure (minimal)? Second, will these plans be able to go directly on the ACA exchanges for people buying plans in the individual market? Third, will premiums be set by actuarial value or by income and if the former will subsidies be available for middle-income families. If so, will it being coming out of state budgets or can federal subsidies from the exchanges be used (likely would have to be offered as a “qualified health plan”)? Fourth, will small business and other employers be able to buy into the plan?

How policymakers decide to address these details will have a significant impact on how much uptake the buy-in proposal would have. Given that these proposal are merely in the “idea” stage, it’s too early to have answers to these questions though various versions have been evaluated by the State Health and Values Strategies/Manatt Health.

Personally, it is tough to see how private insurance plans will compete with a public option buy-in if offered in direct competition. This concept of crowding out private insurance is one of the main arguments used against a public option — not that it is a particularly compelling policy argument if public plans are able to provide high value care with lower costs.  

States considering: Colorado, Connecticut, Illinois, Nevada, New Jersey, New Mexico, Massachusetts, Minnesota, Washington

Single Payer/Universal Health/Expansion of coverage for immigrants

Current federal law bars most immigrants from obtaining public benefits including Medicaid for five years after immigrating to the US. Undocumented immigrants are entirely ineligible for public support for health insurance coverage. And of course, the Trump Administration proposed “public charge” threatens public health and health care access for all immigrants, and has been vehemently opposed by physician and public health groups.

California has already implemented legislation that provides health insurance coverage for minors as well as safety net coverage for all. California’s new governor, Gavin Newsom, is proposing extending Medi-Cal coverage to undocumented minors to those under the age of 26, in line with other age cut-offs part of the ACA. In addition, New York City recently unveiled a plan for universal healthcare through expansion of it’s MetroPlus health plan to the nearly 600,000 uninsured individuals in the city, giving individuals access to doctors and hospitals in New York City.

On the same day New York City announced its plan, Washington’s governor, Jay Inslee, proposed a public option that would have subsidized premiums and have Medicare-like reimbursement rates. One unique feature of this plan is that instead of tiering options based on cost-sharing, as it is done on the ACA marketplace exchanges with Bronze, Silver, Gold, and Platinum plans, this plan will have standardized cost structures and instead tier based on provider networks.

Drug Pricing

Drug pricing is a hot topic in the policy world these days (and the fact the something needs to be done seems to be one area of bipartisan agreement in Washington). There are several state-led initiatives as well. California’s governor Gavin Newsom issued an executive order that leverages the state’s bargaining power to negotiate lower drug prices with manufacturers for Medi-cal and government employee plans.

It remains to be seen if private insurers will join this bargaining unit. However, if this plan is able to negotiate down drug prices, perhaps most powerfully by excluding excessively priced drugs from the formulary, this could open the gates for other states and the Federal government to do the same. One limitation, however, is that federal law typically requires Medicaid to cover all FDA approved drugs as long as the manufacturer participates in the drug rebate program (which gives the government a 23.1 percent discount from the average manufacturer price). Of course, discounts like this tend to not mean much for drugs where the manufacturer can set just about any price.

State Level Individual Mandate

A less popular policy initiative is reinstating the “individual mandate” to have health insurance at the state level. Congress repealed the tax penalty for the individual mandate as part of the tax bill passed in 2017. This, of course, has led to significant press about the health of the ACA marketplace (enrollments seem to have held steady) and, under some “creative” legal reasoning by federal district judge Reed O’Connor, been used to declare the entirety of the ACA unconstitutional.

While the ruling appears unlikely to stand up to legal scrutiny (one never knows with the ACA-related cases), several states have moved forward with plans for state individual mandates. This includes New Jersey, Vermont, and DC, which have recently passed laws enshrining an individual mandate, and California, Washington, Hawaii, Maryland, Connecticut, and Rhode Island are actively considering it.

Looking Forward

After examining the state-level policy moves, I think there’s no doubt that the Democratic party has moved significantly further to the left, compared to the ACA, when it comes to healthcare policy. I expect that health care will dominate the 2020 primaries, and the conversation is going to be about expanding coverage. So, get ready for a lot of back and forth on Medicare for all and various universal healthcare coverage plans. I also expect that Democrats will have learned from the mistakes from the ACA and gravitate to broad, simple ideas that are popular (Medicare for All) rather than technocratic policy changes that tinker at the edges.

Rahul Nayak is a 2018-2019 Student Fellow at the Petrie-Flom Center.

Rahul Nayak

Rahul Nayak was a fourth-year medical student at Harvard Medical School during his fellowship year. As part of the Program on Regulation, Therapeutics, and Law (PORTAL) at Brigham & Women's Hospital, his research interests are in pharmaceutical policy, physician prescribing habits, and access to health care. He attended Duke University, where he studied biomedical engineering and economics. He then completed a two-year fellowship at the NIH Department of Bioethics. His research has led to first-author publications in JAMA, Annals of Internal Medicine, Health Affairs, and Bioethics. He is currently a resident in the internal medicine residency program at Massachusetts General Hospital. Rahul was a Student Fellow during the 2018-2019 academic year, and completed a project entitled “Public Support for Late-Stage New Drug Discovery,” which examines the role of public-sector research on new drug discovery.

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