The Debate Over “Eliminating” Private Insurance Is Semantic Noise

Bill Clark/CQ Roll Call via AP Images

Representative Pramila Jayapal speaks with reporters as she leaves the House Democrats' caucus meeting in the Capitol. 

The first Democratic presidential debate showed how banning private health insurance in any future universal health-care plan has become a big symbolic flashpoint. During the two-night debate, only four of the 20 candidates raised their hands when asked if they would ban private health insurance, despite the fact that three of the non-raisers actually sponsored a bill, Senator Bernie Sanders’s Medicare for All Act, which would effectively do that. In addition, California Senator Kamala Harris, one of the four to agree on banning private health insurance in the debate, walked back her answer the next day, in what has become a months-long pattern of confusing responses from her on the question.

This one provision has garnered a disproportionate amount of attention, due to conflicting political passions. The most dedicated single-payer activists, political leaders, and volunteers are attached to the idea as part of the strategy of making insurance companies the main villain in the debate. Yet even among people who support raising taxes to provide a national health insurance program to all Americans, a clear majority oppose eliminating all private insurance. Among those with a favorable opinion of Medicare for All, banning the private insurance system is considered one of the least important elements. Multiple polls also show that the proposed ban is very unpopular with the average American.

Looking beyond the emotional consideration, the outsized focus on insurance is bizarre. The addition of this particular provision makes very little policy difference compared to almost all the other major decisions that would go into Medicare for All.

Among supporters, the most common stated reason for banning private insurance from covering anything that the new Medicare for All also covers is true health-care equality. When asked about it, Representative Pramila Jayapal (D-WA), the main sponsor of the House Medicare for All bill, answered, “I think if you make $500,000 or you make $50,000 you should have access to the same health care. Congress members shouldn’t have better health care access than workers. CEOs should not have better health care access than the average American.”

It is a perplexing answer I hear often, because this is not what her bill or Senator Sanders’s bill actually does. They could write the bills to actually require this equality in the entire health-care system, but neither chooses to.

While each single-payer and socialized medicine system is unique, private insurance in those systems serves three possible roles. Complementary insurance covers any cost-sharing that exists under the public plan; Sanders’s bill with no cost-sharing makes that irrelevant. Supplementary insurance covers services not covered by the public program. The story here gets confusing. One reading is that Medicare for All would be so comprehensive, there would no legal room for private supplementary insurance. But you could easily envision loopholes making a slightly altered version of basic services “not covered” (like slightly different models of a knee replacement), allowing for them to be part of supplementary insurance.

Doing that would cause supplementary insurance to blur the line with the third type of private insurance in a single-payer system: duplicate insurance. In most countries, duplicate insurance gives you access to a faster and fancier version of basic services. This includes same-day appointments with specialists, short wait times for elective surgery, or much fancier rooms. The House and Senate Medicare for All bills ban duplicate insurance, but it’s unclear how much blur with supplementary insurance will be allowed. It is this provision, Section 107, which is the entire basis for the authors describing their plans as “eliminating private insurance.”

But Section 303 of both Medicare for All bills allows individuals to privately pay doctors for treatments that Medicare for All covers. You can’t buy private insurance that pays for faster appointments, more time with doctors, and/or shorter wait times. But you can directly pay health-care providers for these same perks. The current proposals very explicitly create a way that CEOs or other rich people can pay for better health-care access, using exactly the kind of mechanism one would expect people making $500,000 a year to take advantage of.

We do know from Canada that when you prohibit private duplicate insurance, but allow people to pay directly, you end up with entities that provide many of the same access benefits, and act very similarly to how private duplicate insurance works in countries like the U.K., Norway, and Denmark. In Canada, you have private clinics that don’t charge premiums, but do charge “annual membership fees,” which are suspiciously close to how much private-insurance premiums would be, and which cover the cost of many faster-access services.

Allowing for so-called concierge care under Medicare for All, or a generous definition of supplementary insurance, means that on a practical level we are not really talking about a matter of principle or equity, but more a matter of semantics and scale. Until there are far more details about provider rates, recruitment, and exactly what would be ruled duplicative services, it is impossible to accurately project exactly how much this concierge care option would cost and how many people would use it. But a reasonable guess is that people earning in the low six figures would be able to afford it, and maybe around 1 percent to 4 percent of the population would use it.

By comparison, if the current Medicare for All bill simply dropped its ban on private duplicate insurance, it is likely private insurance for faster access would be more affordable to the upper middle class and used by maybe 5 percent to 10 percent of the population, particularly among some unions. That is in line with what we see in many European countries with single-payer systems. We know that if you have a good public-health system open to everyone, the vast majority of people will happily stick with it, and only a relatively small percentage would consider paying more to get care slightly faster.

Whether or not an extra 4 percent of the population will be able to pay more to get faster appointment times or quicker elective surgeries in some form is a real policy decision. It is also a legitimate political consideration, given that the possibility of longer wait times is a top concern for voters in polling. But the way this question has been framed has generated a level of passion well beyond the narrow impact Section 107 would have. If the question was better understood as “Should we allow some upper-middle-class people to get faster access because they buy private duplicate insurance, or allow a slightly smaller group of well-off people to get faster access by buying annual membership fees to private clinics?” it would be unlikely to generate the same headlines. This is why health-care policy experts often find the focus on it perplexing.

The peculiar framing around eliminating private insurance exploits the public’s relative lack of knowledge about the intricacies around health care in other countries. While some probably understand the narrowness of the question around special provider access privileges, the vast majority are likely viewing it as a proxy for a range of more important policy issues that we aren’t properly discussing and which might not even be related.

Some people might interpret the private-insurance question as whether they can keep their current “provider network,” which would be meaningless under Medicare for All, as it would make everything effectively in network. Others likely view it as about whether they will pay the same amount for health insurance, a mostly unrelated issue dependent on what new taxes pay for the proposals. Still others likely see it as a proxy for if a candidate wants everyone to automatically qualify for taxpayer-funded public health insurance, which is actually a major divide within the Democratic Party but not one addressed by this question, because that can be done with or without “eliminating private insurance.”

Questions about how the plans will be financed, who will be covered, and how we will manage the number of providers are extremely important, and will have massive impacts on most people. But we are not actually focusing on those questions when precious time is spent on a sound bite that’s technically about which narrow slice of the population pays for some perks.

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