Dr.Michael Kitchell: Notes from the Democratic debate

With the Iowa Democratic caucuses looming, there were a few comments on healthcare made recently that could use a little more discussion.

Sen. Bernie Sanders, when commenting on his single-payer Medicare for All (MFA) proposal, said his plan is needed because there are still around 80 million Americans who are uninsured or under-insured. There are actually 27 million Americans who are uninsured and didn't get coverage from Obamacare because not all 50 states expanded Medicaid, and some of the 27 million uninsured also were individuals who chose to not purchase insurance coverage -- and risk getting sick or injured (and not paying the bills).

Some of those who don't purchase insurance can afford it, though some low-income Americans, even with Obamacare subsidies, could end up paying a large portion of their income to buy it. That is why many agree Obamacare does need some improvement even though more than 20 million previously uninsured do have Medicaid or private insurance now from Obamacare.

The other 53 million who are "under-insured" have policies with high deductibles or out-of-pocket costs that would have trouble paying those out-of-pocket costs, sometimes several thousands of dollars. Luckily, not everyone gets sick or injured.

Some of these under-insured people are covered by their employer's group private insurance, some are covered by Obamacare individual policies with high deductibles, and some are covered by traditional government-run Medicare -- which does not have out-of-pocket maximums (though most Medicare beneficiaries purchase supplemental private coverage to avoid those out-of pocket high costs).

Sanders also claimed his proposal to eliminate all private insurance would cut $500 billion in administrative costs, which is higher than most health care experts estimate could be saved by that action. Though private insurers do cause physicians and hospitals to hire many staff to help with all the paperwork and preauthorizations, Medicare and Medicaid also have many rules and regulations that take many staff to comply and document.

Medicare for All with a single-payer would not make administrative expenses go away, there would be even more as benefits are increased.

There are also some variations in medical practice patterns from region to region that are a result of higher utilization and intensity of services, resulting in higher spending.

Dartmouth University research showed there is large variation in utilization of tests and treatments from one region or physician groups compared to other regions. Insurance companies have usually reduced over-utilization locally with managed care or pre-authorizations -- that traditional Medicare doesn't do. Medicare neither manages much utilization of services, or even stops much of the fraud (which southern Florida is known for).

Though most experts think the savings on administrative costs would be about half of Sanders' number, the biggest problem with Sanders' plan is there would be a far greater cost to do everything else that Sanders wants to do, including coverage of long-term care and home care. The extra benefits in Sanders' plan would make the additional cost to be more than $30 trillion in taxes over 10 years. This is far higher than former Vice President Joe Biden's, Mayor Pete Buttigieg's, Sen. Amy Klobuchar's and Andrew Yang's proposals to improve Obamacare with a public option.

Taxes would go way up with an MFA single-payer plan, as businesses would no longer pay for their employees' health care -- so Sanders would tax both businesses and employees, instead of having employers and employees pay for private insurance.

His plan is not as simple as replacing the cost of private insurance with the same dollar amount going to taxes -- the cost would be far higher because of the additional benefits in Sanders' single-payer plan.

Sanders also answered a question about what would happen to all the health insurance employees in Des Moines and elsewhere that would be laid off with his single-payer plan ending private insurance. In a previous answer, he said those insurance workers could go work in hospitals, ignoring a study by Stanford researchers who predicted hospitals would lay off 1.5 million hospital workers if his MFA plan was implemented (which dramatically reduces payments to physicians and hospitals).

His latest answer was that he would set aside billions of dollars to retrain all those insurance employees for various new jobs.

Sen. Elizabeth Warren has also said these insurance employees who would be laid off with her proposal could work for Medicare, which at least acknowledges there would still be plenty of administrative tasks to be done with her new single-payer MFA plan.

Buttigieg has not been in favor of the huge and disruptive change to a single-payer health care system like Sanders and Warren propose. Buttigieg does let people who like their private insurance keep it, and he plans to improve Obamacare and add a public option for those who don't choose private insurance.

He also had the courage to say that he would require ("mandate") everyone to be insured, and that those who choose the public option or private insurance would pay no more than 8.5 percent of their yearly income to purchase coverage.

Klobuchar has been the only candidate who proposes to improve Obamacare and add a public option that is run not by the government, but by a nonprofit insurance company. She is no doubt aware of many hospital and physicians' concerns about the large decreases in Medicare payment rates to rural areas and Iowa (and Minnesota). Klobuchar has been a strong supporter of Medicare equity in geographic payments for many years.

Rural and Iowa physicians and hospitals are paid far less by Medicare than states with larger cities, sometimes so little that physicians have been losing money on many services. Private insurers in Iowa and many other states pay far higher than Medicare for the same services.

Unless Medicare's geographic payment inequities are corrected, rural and Iowa providers will have marked difficulty retaining enough physicians to give adequate access to patients.

Getting a radical change in our health care system such as a MFA single-payer plan would require not only the Democrats to win the presidency and getting majorities in Congress, it would require many Democrats to change their views. As Klobuchar noted, 75 percent of the current Democrats in Congress, including Nancy Pelosi, support improving Obamacare -- and do not support the MFA single-payer proposals.

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