Congress Holds Hearing on “Medicare for All”

Congressional Budget Office analyzes various single-payer proposals

May 07, 2019

This past week, “Medicare for All” garnered national attention as the House Rules Committee held a hearing on a proposal for a single-payer health system. Although unlikely to move forward anytime soon, proponents hailed the hearing as a first step, while opponents, including the American Hospital Association cautioned against putting vital services at risk in a “one-size-fits-all approach.”

While there currently exist a number of different Medicare for All type proposals, last week’s House Rules Committee hearing focused on HR 1384, introduced in February by Rep. Pramila Jayapal (D-WA). This 120-page proposal would cover all U. S. residents under a government-run, single-payer system, within two years. Residents would have no premiums or cost-sharing requirements, and the current system of Medicare, Medicaid, and insurance exchanges would be eliminated.

The Congressional Budget Office (CBO), a non-partisan entity that provides budget analyses for Congress, also released a new report last week outlining considerations for policymakers in designing a single-payer health care system, such as the current Medicare for All proposals. The CBO noted that government spending under a single-payer system would increase substantially because the federal government would be picking up costs that are now spread across private and public sources. However, whether total overall spending on health care would increase depends on factors such as covered services, provider payment rates, and patient cost-sharing requirements.

For example, the report states that if provider rates are set at current Medicare rates, both government spending and total national spending on health care would be lower. However, this could also reduce supply and quality of care. Under HR 1384, health care providers would operate under a global budget for services, established each year through negotiations between the provider and a regional director, newly created under the proposal. According to CBO, other countries with single-payer systems have set rates using global budgets with mixed results.

A single-payer system also must address the role of insurers. The federal bill would essentially replace private insurance as private insurers would be prohibited from selling, and employers from offering, coverage that duplicates the benefits in the system. Insurers could, however, sell coverage for additional benefits not covered under the federal program.

The CBO also covered the topic of hospital ownership and employment of providers under a single-payer system. About 70% of U.S. hospitals are currently privately owned, but the CBO says that under a single-payer system the government could have greater control over the delivery system if it moved to more government ownership. HR 1384 does not appear to address changes to the ownership of hospitals and employment of providers.

With the Senate currently controlled by Republicans who have long opposed single-payer proposals, and House Democratic leadership also concerned about the politics of these proposals, HR 1384 and other Medicare for all proposals are unlikely to move forward anytime soon. However, Senate Republicans have also expressed a desire to stage a Senate floor vote on the Medicare for All proposal introduced by Senator Bernie Sanders in order to get Democrats on the record in advance of the 2020 elections. WHA will continue to follow all these proposals as they progress in this current Congress.

This story originally appeared in the May 07, 2019 edition of WHA Newsletter