How ‘Medicare for All’ Would Impact Our Lives

Daniel Davis / Rachel del Guidice /

Obamacare is old news for the political left. Now, the big item is “Medicare for All”—a single-payer, government-run health care system. But what kind of impact would that have on Americans’ lives? In this episode, we discuss that and more with the administrator of the Centers for Medicare and Medicaid Services, Seema Verma, who joins us for an exclusive interview. Plus: The New York Times caves to pressure from the left by changing a Page One headline, putting President Donald Trump in a more negative light. We’ll discuss.

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Daniel Davis: I’m joined now in the studio by Verma. She is the administrator of the Centers for Medicare and Medicaid Services. Administrator, thanks for your time today.

Seema Verma: My pleasure. Thanks for having me.

Davis: Health care remains such a concern for Americans, a top issue for voters, according to the most recent polls. Some on the left are now addressing that by proposing what they call “Medicare for All,” which would fundamentally shift who’s in charge of health care decisions.

You actually administer Medicare and Medicaid as they exist today. From your perspective, is this Medicare for All proposal the right way to go? What kinds of changes would people feel under that approach?

Verma: Well, as the head of the program, I am very deeply concerned about these types of proposals. First of all, Medicare is a program that our seniors have paid into their entire lives, and now we’re talking about putting 180 million people into this program. So stripping away private coverage for 180 million people and putting it into the program that was designed for them.

So I’m concerned about the impact on seniors directly. But it’s also taking away this private coverage, which most Americans are happy with their private coverage, and they shouldn’t be forced to be in a Washington, D.C.-run program.

The other main concern with this is that when the cost of this is going to be very expensive for the country, some of the estimates coming out is that this could be a $32 trillion program. The more expensive the program becomes, everybody is paying higher taxes.

When you’re paying higher taxes, it puts the government or Washington bureaucrats in a decision-making role where they have to figure out, “Well, what kind of coverage should people have? What kind of benefits should they be covering?” And those decisions then are made in Washington, D.C.

That concerns me in terms of the decision-making. We want to see patients and families in control of their health care, not the government, not D.C. bureaucrats.

When they’re in that type of decision, what we’ve seen in other countries that have tried these types of programs is that, that leads to rationing of care and it leads to long wait times.

What we see in other countries … that’s why a lot of people will come from other countries to get care in America, because they know they can get ready access to it.

But in other countries, whether it’s Canada or the United Kingdom, in those countries they could wait for months to get routine services that Americans can get very readily. So that’s one of the main concerns that I have.

Davis: Yeah, you mentioned access to care, and that is something that here at The Heritage Foundation we’ve found in talking to people about their concerns when it comes to health care is being able to access the doctor when they need it, and their fear being that they’ll lose that access when they need it the most.

How would Medicare for All affect people’s access? You mentioned countries like the United Kingdom where there’s over 4 million people on waiting lists and long wait [times], sometimes a year and a half for necessary treatments.

Is that something that people should expect under a Medicare for All proposal?

Verma: I think it actually could exacerbate access issues that we already have today in some of our public programs.

So if we look at the Medicaid program today, because providers are paid under government rule, so government price setting … prices set in Washington, D.C., a lot of providers today won’t even see patients on Medicaid, won’t see patients on Medicare, and they’re kind of moving to more of a direct pay situation.

Now, if the entire market is being paid by government rates, providers don’t even have the ability to have some income that’s more appropriate for them under commercial reimbursement. You could see providers sort of turn away from the government programs, which is going to exacerbate access problems. That’s actually what gives me the most concern for our beneficiaries.

These are people that have paid into the program their entire life and now we’re asking them to get in line and wait for care. I just think that’s immoral.

Davis: Well, [there’s] a lot of talk, obviously, about Medicare for All, but less focus has been given to the people that are actually part of that program now—American seniors.

What’s in it for them in the Medicare for All program? What happens to their care?

Verma: Well, my main concern is that they’re going to face access problems. They’re going to face long wait times and they’re going to be subject to potential government, Washington, D.C. rationing of their health care services.

This is a program that was designed uniquely for them.

What we’re hearing from the Medicare trustees is that the program is already on shaky financial ground. The trustees are indicating that in six, seven years we’re going to run out of money and part of the program.

Our administration has been focused on protecting the program, strengthening the program, making it work better for seniors. I think these proposals threaten all of that and could expose them to longer wait times and rationing of care.

We want to make sure that we’re creating a program that’s sustainable over the long term, and putting 180 million people into it [is] not going to solve that problem.

Davis: Another proposal being discussed is the public option, basically letting people under the age of 65 buy into traditional Medicare. You recently wrote an op-ed about this in The Washington Post, and you referred to the public option as “a Trojan horse with single-payer hiding inside.” I want to ask you about that.

Why is this proposal just as concerning to you as the full-fledged Medicare for All?

Verma: I think these are all versions of more and more government.

That’s what we’re talking about. More and more Washington-controlled health care, one-size-fits-all, where the government is making decisions about your care, not you, not your family. That’s what the discussion is today and in all of these types of proposals.

I think the public option in particular is problematic for a few reasons.

No. 1 is people are saying, “Hey, if you want to be able to get a public program, you should be able to get one and look how well these public programs are doing or they’re going to be cheaper and less expensive.”

Well, the reason why public programs are less expensive is because we pay doctors less. In the Medicaid program, 30% of doctors won’t even see a Medicaid patient and those numbers are rising every year.

And so that’s a concern, that a public option would not have the type of access that people are used to. They wouldn’t be able to have that choice of doctor. They wouldn’t be able to go see who they want to see because that provider may not be in the network.

The other concern is that when that happens, where there’s lower reimbursement, providers are going to react by increasing their charges to those folks that are still commercially insured or through their private insurer. So that could actually mean raising premiums for everybody else in the market.

We’ve tried these types of what I’d say [are] D.C.-based solutions. If you look at Obamacare, for example, that’s a great example of where the government stepped in and took over the individual market.

Let’s look at the results of that. I mean, the results have been, whether you like Obamacare or not, the simple fact is rates went up by over 100% across the nation on average. And some parts of the country, they went up by 200%.

For people that are not subsidized today, they can’t afford health insurance and people are leaving the individual market. Millions of people are leaving because they can’t afford coverage anymore.

And then choices went down. Obamacare created monopolies across the nation where there’s only one insurance company, and they’re just increasing rates every year.

I think there’s broad acknowledgement that Obamacare didn’t work, doesn’t work, and won’t work, and that’s why people are looking for different solutions. But it seems surprising to me that we’re doubling down on big government, big D.C. government solutions, which have not worked in the past.

We need to move to a system where we have a competitive free-market environment and people say, “Well, it’s not working and so let’s do more government.” But the reality is we haven’t had a free market.

We have the government controlling almost 46%, 47% of health care to begin with, and we don’t have an environment where there’s full transparency on pricing, and the competition is not there.

We want to create an environment where providers are competing for patients on the basis of cost and quality.

Davis: Another major development in health care is personalized care where people can get tests done that tell them about their particular bodies, health problems, and their needs based on the genetic makeup. This kind of innovation holds real promise for patients in the future.

How would single-payer or Medicare for All impact these kinds of innovations that are really helping patients?

Verma: Well, all of us use the health care system from time to time. I know my husband has a serious cardiac condition, so I’m very concerned about making sure that there’s innovation for anybody that’s dealing with the disease.

You always want to know that there is the hope of innovation and treatment and cures that are going to address your situation.

The concern I have is that the government has already had problems in the area of innovation. If we look at the Medicare program, it has problems with approving new treatments that come to market.

One example is insulin pumps for diabetics. They were insulin pumps in the market widely used in the private market. But when people would age into the Medicare program, the pump that they had been using for years was not covered by Medicare.

The reason why is because Medicare is prescribed in law and it takes an act of Congress sometimes to provide coverage for innovative treatments. The law was set up so long ago and it hasn’t been updated, and it says you can pay for supplies and you can pay for durable medical equipment.

But technology is changing so rapidly that sometimes it doesn’t fit neatly into the buckets that Congress has set up.

And so the agency gets stuck, and it took years for the agency to figure out how we can cover these pumps that were widely available in the private market. If we didn’t have a private market, you wouldn’t even have that type of innovation.

I think that’s an important point because if the private market, which is more nimble in paying for new technology, if they’re not paying for these things and we’re only relying on the government, innovators aren’t going to make those investments because they’re not going to get paid for them.

A couple of other examples are some of the new cancer treatments that we’ve had with CAR T. These new treatments came out, [the] private sector started to pay for it.

When they first came out, Medicare was not paying for it. It was a covered services people were using for. But Medicare didn’t have a rule or regulation to pay for it, because it was so new and so innovative, the agency is trying to figure out, is this a process? Is it a drug?

Because of that, because they have problems paying for new and innovative treatment quickly and rapidly, that creates access problems for patients.

Those are some of the things that the Trump administration is actually trying to address. The president wants to strengthen the program. He wants to make it work better for seniors and address some of those issues.

But if we create this bottleneck situation where every innovative device in America has to come and ask permission from one D.C.-based agency, I think we have a real problem in terms of creating investment in this country for innovation.

Davis: Well, it’s no secret that doctors are increasingly frustrated with the practice of medicine, particularly the regulations that keep them stuck on paperwork when they’d rather be delivering care to their patients.

Some younger doctors and practitioners say they like the idea of single payer because they think that will simplify [the] payment process and cut down on bureaucracy and paperwork.

Is that an accurate expectation? Or are there better ways to address their concerns?

Verma: Well, one of the things that I remind doctors of is some of the major issues that they’re facing today have been created by D.C. policies.

The issue of physician burnout and moral injury are very real, and I’m deeply concerned about this. We’re hearing rates have increased [of] physician suicide. Medicine has typically attracted some of the best and brightest in our country into this field.

Now, what we’ve turned them into is doing a lot of paperwork, a lot of bureaucracy, and … the vast majority of that has been created by D.C. government policy.

So if we look at, for example … the [Medicare Access and CHIP Reauthorization Act] program. That was a program that, thankfully, we got rid of this [sustainable growth rate formula that determined Medicare Part B reimbursement rates.]

But now we’re requiring our doctors to report all of these process measures that don’t mean anything to them and don’t mean anything to patients, but the government is putting all this extra work on them.

They’re seeing patients during the day, they’re reading medical journals, and then they have to sit and read all of these different regulations to be able to comply.

The other thing [is] … a lot of government policies over the last 10 years have created an anti-competitive framework for doctors, where government policies pay hospitals more than they pay doctors for the exact same service.

That’s why you’re seeing all these hospital systems buy up physician practices and physicians are losing their autonomy and they’re not independent practices anymore. That’s going in the direction where you have more and more employed physicians.

I think that’s what’s creating a lot of frustration in the fields.

But the root of that has already been government policy. You hear folks say, “Well, they’re going to have less paperwork.” Well, the government still requires authorization for services. The government still requires a lot, so that’s not going to go away.

I’m concerned that the government has not been sensitive to the impact of all of its regulations [on] doctors and putting them in a position where they can control everything. It’s going to make it worse for our nation’s best and brightest.

Davis: Well, we’ve talked about the health care system as a whole and competing systems like Medicare for All, which, of course, would require Congress to act in a major way. But as a member of the executive branch, what is the Trump administration doing right now to improve our health care system?

We saw recently that you made several announcements, one of them on price transparency. What are some of these things that you’re able to do from the executive branch that are improving things?

Verma: Sure. Well, our administration is focused on making sure all Americans have access to affordable, high-quality care.

Unfortunately, that’s not the situation today. The concern is that people are thinking we just need to have the government take over and do everything. Have the government pay for everything and all our problems will be solved. That’s just going to increase taxes.

I think the discussion needs to focus on, how are we going to address rising health care costs in our country?

The reality is the last 10 years of government intervention and D.C.-based solutions haven’t produced anything. They have not lowered the cost of health care in our country. And because of that, so many people can’t afford it.

The conversation from our administration standpoint is, we’re addressing the underlying drivers of health care costs. That’s why you see President Trump so focused on the issue of drug pricing because that’s where we’ve seen rapid acceleration in health care costs.

Big move on price transparency. We want to empower patients with the information that they need to make decisions about their health care. They should be making those decisions, not Washington bureaucrats.

We want to make sure they have price information, they have quality information, and they have access to their medical record.

The announcement on price transparency was requiring hospitals to post all of their negotiated rates. In that way, when people are going in for a service, there are many of our health care services that are predictable. Not all of them are urgent.

And so in those situations where you know you’re going to have a procedure, a surgery, whatever that is, you should be able to go on a hospital’s website and see what that’s going to cost.

It will allow you also … the way we’ve set up our proposal is it will allow you to look at other hospitals and to make comparisons, so do an apples-to-apples comparison.

I think it’s very innovative. It speaks to the president’s bold leadership. A lot of special interests won’t like this, but our administration is about doing what’s right for patients.

Davis: Well, this is a very informative and insightful, and it’s great to know what the executive branch is doing on this. Administrator, thank you so much for your time today.

Verma: Appreciate it. Thank you.

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