The House MFA Bill is Here! The House MFA Bill is Here!

Note: This is just an initial, cursory glance, not a deep dive.

Yesterday, amid much hoopla, the House Democrats official released an updated version of the long-awaited national universal single payer healthcare bill, aka "Medicare for All".

The official title of the bill is literally "The Medicare for All Act of 2019", and for the most part it's pretty similar to the Senate version rolled out in September 2017 by Sen. Bernie Sanders and a dozen or more Democratic Senators. However, there are several key differences between the two:

• First, the timeline for ramping up the program:
  • Under the Senate version, it would be phased in over four years: Children & 55-64-year olds in Year 1; 45-54 year olds in Year 2; 35-44 year olds in Year 3; and 18-34 year olds in Year 4.
  • Under the House version, it would be just a two year process: Children/55-64 year olds in Year 1; everyone else in Year 2.

Considering that the ACA took four years to ramp up (five, really, when you include all the trimmings), and it only directly impacted perhaps 30 million people or so (~15 million via Medicaid expansion, ~12 million via ACA exchanges and a few million miscellaneous), I'm of the opinion that even the Senate version's 4-year timeline would be pushing the point...but you never know.

• Second, the included benefits: In addition to everything else covered in the Senate version, the House version would also cover comprehensive Long-Term Services & Supports, or LTSS. Currently, Medicaid spends around $110 billion per year on LTSS, plus what appears to be another $53 billion or so in private spending via supplemental insurance premiums and so forth, for $163 billion/year total. LTSS is one of the largest holes in the otherwise-comprehensive Senate bill.

I'm not sure how much this would impact the cost of the House version as opposed to the Senate version, but I presume that with inflation and so forth, it would bump whatever the Senate version costs up by another $2 trillion or so over a decade.

• Third...and this is the one which is really gonna make many doctors, hospitals, clinics etc. go absolutely bananas: The House version appears to basically outlaws profits for providers:

SEC. 614. PAYMENT PROHIBITIONS; CAPITAL EXPENDITURES; SPECIAL PROJECTS.

(a) SENSE OF CONGRESS.—It is the sense of Congress that tens of millions of people in the United States do not receive healthcare services while billions of dollars that could be spent on providing health care are diverted to profit. There is a moral imperative to correct the massive deficiencies in our current health system and to eliminate profit from the provision of health care.

(b) PROHIBITIONS.—Payments to providers under this Act may not take into account, include any process for the provision of funding for, or be used by a provider for—

(1) marketing of the provider;

(2) the profit or net revenue of the provider, or increasing the profit or net revenue of the provider; (3) incentive payments, bonuses, or other compensation based on patient utilization of items and services or any financial measure applied with respect to the provider (or any group practice, integrated health care delivery system, or other provider with which the provider contracts or has a pecuniary interest), including any value-based payment or employment-based compensation

I understand the idea of making sure hospitals are nonprofit entities, and I guess I understand the philosophy behind not giving them an advertising budget, but I'm not sure how this would be enforced for solo practitioners. How do you prevent a sole proprietor from making a profit...isn't that where their living expenses come from? Does this mean doctors can't take out ads in the local paper? There was a time when the AMA banned doctors from advertising, I believe...

There are other differences, such as how the bills tackle prescription drug pricing, how it handles price controls for hospitals and so forth, which I'll have to dig into further before commenting on, but the two items above are the most obvious ones.

The other major hole in the House bill...just like the Senate version...is that neither one specifies just how they'd actually be paid for.

To the best of my knowledge, the closest thing to funding details in the Senate version are these ideas proposed by Bernie Sanders:

• Elimination of special tax breaks: $4.2 trillion over 10 years. The main target: company-provided health benefits for employees. They would no longer be needed.
• Business payroll tax: $3.9 trillion over 10 years. Companies would pay a 7.5% income-based fee, but Sanders asserts it would cost them less overall compared to the current system.
• Household premiums: $3.4 trillion over 10 years. Families would pay a 4% income-based fee, considerably less than what they pay now.
• Higher taxes on the rich: $1.8 trillion over 10 years. Raise marginal rates to as high as 52% on the richest Americans. The current top rate is about 39.6%. Also, limit deductions and treat taxes on dividends and capital gains equally.
• A new net wealth tax: $1.3 trillion over 10 years. This new tax would apply to the wealthiest 0.1%, or 160,000 households. A 1% annual tax would be applied to net worth exceeding $21 million.
• One-time tax on offshore profits: $767 billion over 10 years. Sanders wants to tax profits of Americans companies that are earned and held in other countries. These profits are not taxed until they are returned home under current U.S. law.
• Increased estate taxes: $249 billion over 10 years.
• Fee on large Wall Street banks: $117 billion over 10 years. The six largest U..S. financial institutions would get the bill.

I have no idea whether those 10-year revenue generation estimates are accurate or not, and I find it a bit amusing that Sanders refers to the additional 4% income tax as an "income-based premium paid by households". Here's the details on this idea:

4 percent income-based premium paid by households Revenue raised: $3.5 trillion over ten years.

The typical middle class family would save over $4,400 under this plan. Last year the typical working family paid an average of $5,277 in premiums to private health insurance companies. Under this option, a typical family of four earning $50,000, after taking the standard deduction, would pay a 4 percent income-based premium to fund Medicare for All – just $844 a year – saving that family over $4,400 a year. Because of the standard deduction, families of four making less than $29,000 a year would not pay this premium.

This amounts to zero premums for those earning around 100% of the Federal Poverty Level, effectively increasing on a sliding sale as you move up the income ladder (the $844/$50K example Sanders uses amounts to a 1.7% of income premium, for instance. Framing is important, folks.

I haven't had a chance to read over the House bill yet but plan on doing so in the next few days. This link goes to the official listing at Congress.Gov (it looks like it's officially H.R. 1384), but the actual text isn't available there yet so I've attached a PDF copy of it below.