Democratic presidential candidate Kamala Harris is again clarifying her position on private health insurance, days before the next round of primary debates, as she rolls out a new plan to create a government-run healthcare system that covers every American.
On Monday morning, the California senator unveiled new details of a proposal she says will create a Medicare-for-All system, which will allow some forms of private insurance to participate, if they want to play by certain rules.
Those insurers will have to “adhere to strict Medicare requirements on costs and benefits,” Harris writes in a post on the web site Medium published Monday. It is, she says, similar to today’s private Medicare plans, also known as Medicare Advantage, which covers about a third of seniors on Medicare today. “Unlike the current system, private plans in the new Medicare system will be held to stricter consumer protection standards than they are today, such as getting reimbursed less than what the Medicare plan will cost to operate, to ensure that they are delivering meaningful value,” Harris writes.
“People will also be able to purchase supplemental insurance covering services not included in Medicare, such as medical insurance for traveling abroad, or cosmetic surgery.”
Harris’ position on Medicare for All, and specifically the role of private insurance, has tripped her up on the campaign trail more than once this year.
At a CNN town hall in January, Harris suggested she didn’t have a problem eliminating private insurers. “The idea is that everyone gets access to medical care, and you don’t have to go through the process of going through an insurance company, having them give you approval, going through the paperwork, all of the delay that may require,“ she said.
She then backtracked, insisting that she was open to a range of options for providing universal health coverage.
In a May interview, Harris denied that Medicare for All would eliminate private insurance, pointing out that supplemental private insurance would still be available. But as fact checkers pointed out, that is a very different role than the type of employer-sponsored private insurance most Americans now receive.
The question Harris’ latest proposal raises is how many private insurance companies would choose to participate in a system with the kind of stringent stipulations she laid out.
Harris, herself, issues a warning in her Medium post: “if they want to play by our rules, they can be in the system. If not, they have to get out.”
The former California attorney general also tries to tackle another thorny issue that has bedeviled Medicare for All supporters: how to pay for it.
Harris’ proposal says she can do it without taxing the middle class, one of the key criticisms of 2020 primary rival Bernie Sanders’ Medicare-for-All bill, which Harris has co-sponsored in the Senate.
“One of Senator Sanders’ options is to tax households making above $29,000 an additional 4% income-based premium. I believe this hits the middle class too hard,” Harris . “That’s why I propose that we exempt households making below $100,000, along with a higher income threshold for middle-class families living in high-cost areas.”
Instead, Harris says she would pay for her plan by, among other things, taxing Wall Street stock trades at 0.2%, bond trades at 0.1%, and derivative transactions at 0.002%.
“Think of it like this: that’s a $2 fee on a $1,000 trade by investors and big banks,” she writes. “I would also end foreign tax shelters by taxing offshore corporate income at the same rate as domestic corporate income.”
Harris says those taxes “would raise well over $2 trillion over ten years, more than enough to make up the difference from raising the middle class income threshold.” She would also raise taxes on the top 1% of income earners, and tax capital gains at the same rate as ordinary income.
Harris alluded to those ideas in a CNN interview earlier this month, prompting the anchor to wonder if this was “realistic thinking.” Sen. Sanders’ adviser Jeff Weaver also knocked the idea, arguing, “Without unicorns, magic wands - health care is not free. You have to have to pay for it. ... People will paying less under Medicare for All than they are now, and that’s the point.”
Former Vice President Joe Biden, meanwhile, has attacked the entire concept of Medicare for All, saying it would be too costly and disruptive and that Democrats should focus on protecting and expanding Obamacare, instead.
Healthcare economists estimate expanding Medicare to the entire American population would cost more than $30 trillion. While supporters like Sanders and Harris say new taxes would pay for part of it, they are also assuming large cost savings as a result of lower administrative fees and reimbursement to providers. Many experts doubt the savings will be as large as those lawmakers project, however.
Harris argues a longer phase-in period will help. Instead of four years, like Sanders’ legislation, Harris would give the country 10 years to transition to Medicare for All. And she observes in her Medium post that if the United States does nothing over the next decade, healthcare costs “will skyrocket to an estimated $6 trillion a year. So the real question is: how can we afford not to act?”