A President Harris Would Mean Good-Bye To Private Insurance
Since announcing her candidacy for the Democratic nomination for president, Senator Kamala Harris hasn’t been able to make up her mind about whether she wants to eliminate private health insurance.
At a CNN town hall in January, she voiced support for nixing private insurance, stating, “Let’s eliminate all of that. Let’s move on.” Then, in May, she said she was misunderstood and pushed for supplemental private coverage. A few weeks later, during the first set of Democratic presidential debates, Harris raised her hand when the moderators asked who on the stage would eliminate private insurance. Hours later, she said she misheard the question, and reversed course.
Now, she claims to have a plan that will supposedly provide health coverage for everyone while “preserving a role” for private insurers.
Don’t believe it. Harris is bent on killing off private insurance and pushing all Americans into a one-size-fits-all, government-run health plan—at an annual cost of trillions of taxpayer dollars.
Here’s how her plan would work. The federal government would roll out a “new and improved Medicare system.” That plan would cover just about every healthcare service known to man, including hearing aids, vision, more mental health services, and “innovative patient programs to help people identify the right doctor.”
The government would automatically enroll every newborn and uninsured American in the new plan. Anyone else could opt to buy into it, including those who currently purchase coverage in the individual market and workers who get insurance through their employer. Harris proposes to phase in her plan over 10 years, in order to provide “a commonsense path” for everyone to adjust to a new healthcare reality.
She says her plan differs from the single-payer proposals backed by Senators and presidential hopefuls Elizabeth Warren and Bernie Sanders because it allows private insurance to continue operating. But that’s only if they “play by our rules.” If they can’t or won’t, “they have to get out.”
Of course, they’ll have to get out eventually. After the 10-year transition period, private coverage would be illegal, just as in the Medicare for All plan sponsored by Sanders and supported by Warren. (They envision a four-year transition.)
Second, Harris’s transition period would be rocky for the more than 180 million people with employer-sponsored health coverage. The private insurers Harris would allow to continue operating would have to provide the same extensive benefits as the new Medicare plans while being “reimbursed less than what the Medicare plan will cost to operate.” Harris also mentions imposing other “stricter consumer protection standards” on private insurers.
Not every insurer will be able to offer gold-plated benefits at costs lower than Medicare’s. After all, the federal program already underpays doctors and hospitals. According to the American Hospital Association, in 2017, Medicare reimbursed hospitals 87 cents for every dollar they spent caring for its beneficiaries. By 2022, Medicare’s payment rates are slated to be 40 percent less than average private insurance rates.
Making life impossible for private insurers may be the point. If they can’t make the math work, then their customers will end up in Harris’s scheme well before the 10-year mark.
In short order, the promised “role” for private insurers will disappear—and Harris’s health plan will be the only one available.
That would be an expensive proposition. Naturally, Harris’s plans to cover the cost are fantasy. She claims her plan would not require a tax increase for members of the middle class—unlike the Sanders/Warren vision for Medicare for All. She’d exempt households with an income under $100,000 from any new taxes to pay for her health plan.
Her big ideas for raising the trillions that would be needed to fund Medicare for All? A financial transactions tax on bond, stock, and derivatives trades. She’d also hike taxes on the wealthy, employers, and investors.
That won’t be enough. Research from the Mercatus Center’s Charles Blahous concluded that doubling all federal individual and corporate income taxes wouldn’t be enough to cover the more than $3 trillion annual cost of Bernie Sanders’s version for Medicare for All. The same would be true for Harris’s plan.
Harris’s healthcare plan aims to be a kinder, gentler form of Medicare for All. But it would still put the government in total control of the country’s health insurance sector—and deprive more than 217 million Americans of the private insurance coverage they currently have.
Sally C. Pipes is president, CEO, and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute. Her latest book is The False Promise of Single-Payer Health Care (Encounter). Follow her on Twitter @sallypipes.