The real differences between the 2020 Democrats’ health care plans, explained

I read the 2020 Democratic candidates’ health care plans. Here’s what they do.

If you want to understand each major Democratic candidate’s theory of how they could win the nomination, look at their health care platform.

Former Vice President Joe Biden is selling himself as the palatable moderate, pitching a public option that builds on Obamacare. South Bend, Indiana, Mayor Pete Buttigieg has a more progressive frame for his similar plan: Medicare for all who want it. Sen. Bernie Sanders, meanwhile, repeats that he “wrote the damn” Medicare-for-all bill in the Senate and presents himself as the only candidate actually committed to single-payer health insurance.

And Sen. Elizabeth Warren has settled somewhere between the left and the center: She supports passing a public option first, but promises she’d try to pass single-payer later, politically doubtful as that might be.

Every plan would represent a significant expansion of the government’s role in guaranteeing Americans access to affordable health care. The Democrats running agree on a few key themes: Everybody should have health insurance. Health insurance should cover most medical services. People should pay less money for health care, both for premiums and out-of-pocket expenses, than they do now.

All of their health care plans would achieve those overarching goals to different degrees. But the fight over Medicare-for-all has become a proxy battle for the biggest disagreement in the Democratic primary: Is the bigger risk too much disruption, or not doing enough?

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The political reality, though, is that health care reform is impossible in 2021 unless Democrats win the Senate. Even if they do, the president would need the backing of 50 senators, including some that are quite conservative, for any plan.

Still, the left vs. center debate has filtered down into the specific provisions of the health care plans being put forward by the Democratic presidential candidates. They reflect a party torn: Single-payer supporters want to make fundamental reforms to a system they view as fundamentally broken, while other Democrats say they must be realistic about what is politically possible, while also appealing to moderate voters.

Americans are still really frustrated with health care costs. Voters want to know how candidates are going to fix it; it says something about their priorities, whatever the political obstacles to reform.

In the choice between Sanders and Biden, or Warren and Buttigieg, health care is a critical consideration for a lot of Democratic voters. The lower-polling candidates have also arrayed themselves across this spectrum on the No. 1 issue of the primary.

These candidates’ respective health care plans have some key differences, though they also share many features.

How do people get their health insurance?

Right now, about half of Americans get health insurance through commercial insurance plans at their work. Another 15 million or so buy individual private insurance on Obamacare’s marketplaces. About 70 million lower-income people are enrolled in Medicaid, and another 45 million elderly people are on Medicare. And 27 million Americans are uninsured.

The most pronounced difference between the Democratic health care plans is on this question: Who pays for health care?

Sanders’s single-payer Medicare-for-all plan, which Warren said she eventually wants to pass, would enroll every American in one government insurance program. The plan would forcibly prohibit most private health insurance, replacing it with a national insurance plan.

Biden, Buttigieg, and most other Democrats are comfortable leaving the current multi-payer insurance scheme in place and instead propose creating a new government option that would compete with private insurance and act as a backstop to make sure everybody has coverage. Biden expects his plan to cover 97 percent of Americans, so by their own estimates, they would get very close to that goal but fall a little bit short.

Warren splits the difference: She says she eventually wants single-payer, but in the meantime would create a public option anybody can join as part of a transition plan.

There are estimates of this and other public option plans that project most Americans would, in fact, decide to move to the public plan. If that proved true, it would mean the Sanders, Warren, Biden, and Buttigieg health care plans are less different in practice than they appear. But that’s a big if.

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Democratic presidential candidate Sen. Elizabeth Warren (D-MA) speaks at a campaign event on November 25, 2019, in West Des Moines, Iowa.

Bernie Sanders (single-payer Medicare-for-all): Every American would get health insurance from the government after a brief transition period. Private insurance plans would be prohibited.

Elizabeth Warren (public option + Medicare-for-all): For the first two years, most private insurance options would remain, as would Medicare and Medicaid, and a new government plan would be made available for anyone to join. Warren says she would pass Medicare-for-all, which would enroll every person in one government plan and ban private coverage, in her third year in the White House.

Joe Biden, Pete Buttigieg, former New York City Mayor Michael Bloomberg, venture capitalist Andrew Yang, Sen. Amy Klobuchar, and entrepreneur Tom Steyer (public option): Private insurance options, Medicare, and Medicaid would remain in place. A new government plan that is open to everyone would be created. Under both Biden and Buttigieg’s proposals, US workers could choose to join the plan. In Buttigieg’s variation, companies would also have the option of deciding whether to send their workers to the public plan and pay most of the costs.

How much do people have to pay for health care?

Americans are frustrated with health care costs. Premiums have been rising faster than wages, and insurance benefits are getting less generous. On average, Americans spend more than $1,100 out of pocket for health care every year, the second-highest share in the world behind Switzerland. One in four Americans say they have skipped treatment for a serious medical condition because they were worried about the cost.

Poll after poll reflects these concerns, even if 90 percent of people do already have coverage. Voters constantly name health care as their top priority for public officials.

Democratic candidates across the board are promising voters that, under their plan, they would pay less money for health care. They would pay less in premiums, their monthly contribution for their insurance plan. They would have lower out-of-pocket costs: both smaller deductibles, the amount patients must pay themselves before their benefits kick in, and cheaper copays, the amount they pay when they visit a doctor or pick up a prescription.

The difference is in how much.

Sanders’s Medicare-for-all bill has set a high bar on out-of-pocket costs: Patients would not have any copayments or deductibles, except for a $200 annual deductible for prescription drugs.

Warren also says she wants to get to a point where every American is insured through a single government plan with no cost sharing, though she’s left open the timetable for reaching that goal.

The public option plans, meanwhile, would maintain some cost sharing and premiums that people would have to pay, but reduce them.

Biden and Buttigieg would build on the tax subsidies for insurance premiums established by Obamacare. The current law pegs those subsidies to the premiums for “benchmark” plans covering 70 percent of medical costs.

With the Biden and Buttigieg plans, federal aid under the new public option would be pegged to insurance plans that cover 80 percent of medical costs. Patients would still be responsible for some copayments and deductibles under the public option plan, though neither the Biden nor Buttigieg campaigns have specified how much; however, lower-income people would receive relief from those out-of-pocket costs. The best estimate we have projects that deductibles could drop by $400, alongside lower copays and out-of-pocket maximums.

There are tradeoffs in these two approaches. No cost sharing means the Sanders and Warren plans could be more expensive for taxpayers and could risk overuse of health care. The benefits imagined in their single-payer proposal would be more generous than any other health care system in the world. Taiwan, for instance, implemented single-payer with low cost sharing and has seen a dramatic increase in use over the past 25 years. But it also had a much higher uninsured rate than the US currently does.

One of the big uncertainties in projecting the cost of Medicare-for-all is how many more medical services people will use. It is something even the policy experts who work on single-payer worry about.

On the other hand, maintaining cost sharing could mean people will skip treatment because of the expense. Research shows that people are not particularly discerning customers when it comes to health care; even those who need treatment might delay it due to cost.

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Bernie Sanders (single-payer Medicare-for-all): No cost sharing, except for an annual $200 deductible for pharmaceuticals.

Elizabeth Warren (public option + Medicare-for-all): The public option that Warren promises to pass in the first year of her presidency would have no annual deductible and low cost sharing, with the plan covering 90 percent of medical costs on average. She would also increase the tax subsidies available to purchase private insurance through Obamacare.

Warren pledges to end cost sharing for everybody under the single-payer government insurance program she says she will eventually pass, though she doesn’t specify a timeline for achieving that.

Joe Biden, Pete Buttigieg, and others (public option): Under the public option, consumers would receive more generous premium assistance from the federal government, pegged to plans covering 80 percent of medical costs. Obamacare currently limits tax subsidies to lower-income brackets, but the Buttigieg and Biden plans would extend the aid to higher-income households to ensure nobody spends more than 8.5 percent of their income on premiums.

None of them detail exactly how much cost sharing patients would be responsible for under the new public plan, though there would be some out-of-pocket obligations. Biden’s proposal specifies that primary care would be covered with no copayment.

Which medical services are covered?

Benefits are one issue on which the Democratic plans are more or less in agreement: Health insurance should be comprehensive. But the more progressive plans take it a step further by adding benefits not typically covered by medical insurance right now.

The services covered by Sanders’s single-payer plan, Warren’s plan, and the various public options start with the essential health benefits defined by Obamacare: hospital care, physician visits, prescription drugs, mental health care, maternity care, etc.

Both Warren’s public option and Sanders’s single-payer plan would add dental, vision, and long-term care benefits to standard insurance coverage. Though some other candidates have separate long-term care plans, their public option proposals would not cover it as a basic insurance benefit like Sanders’s and Warren’s would.

Coverage should be comprehensive, Democrats agree — though they are still figuring out what “comprehensive” means exactly.

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Bernie Sanders (single-payer Medicare-for-all): Essential health benefits plus home and community-based long-term care, dental and vision, and medical transportation.

Elizabeth Warren (public option + Medicare-for-all): Essential health benefits plus long-term care, dental and vision, and medical transportation.

Joe Biden, Pete Buttigieg, and others (public option): Essential health benefits. Buttigieg is proposing a separate universal long-term care program that would pay $90 per day for basic in-home services; Biden would introduce tax credits that people could use to offset the costs of long-term care.

How much are doctors and hospitals paid?

The health care industry has made one thing clear: It views any expansion of government health insurance, whether single-payer or a public option, as an existential threat.

The insurance industry faces extinction under single-payer and a new competitor unmotivated by profit under a public option, so its opposition is obvious. But hospitals and drug companies are especially opposed to these plans, fearing significant payment cuts if the government has more negotiating leverage.

Doctors are a little more divided, though their major trade associations have historically been opposed to single-payer because of government price controls. Private insurers pay double Medicare’s prices for the same health care services, various studies have shown. Providers will face a pay cut if the government program expands to cover more people (or to cover everybody).

Because of the industry’s substantial influence and its previous successes turning Americans against health reform, provider payments remain the area most vague under every Democratic proposal — the candidates don’t want to rile up special interests any more than they already are.

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Bernie Sanders (single-payer Medicare-for-all): Sanders’s is the most aggressive and would set up a national health care budget capping how much Medicare will pay overall for medical services in a given year. Payments would be based on current Medicare rates, which are substantially lower than private insurance rates on average.

Elizabeth Warren (public option + Medicare-for-all): Warren doesn’t specify how much her public option plan would pay providers, but she is promising to pass Sanders-style Medicare-for-all in short order.

Joe Biden, Pete Buttigieg, and others (public option): Though the public option plans promise to negotiate rates that are lower than what private insurance currently offers (one of the ways they would make premiums more affordable), they leave the details to the health department’s discretion.

They’ll have to balance the desire for lower costs with their need to build a sufficient provider network. One lesson from the real world: In Washington state, the public option plan ended up paying about 165 percent of Medicare rates following some intense lobbying by the medical industry.

How much do taxes need to be raised to pay for it?

Arguably the most vexing question for Democrats and their health care plans is: How do you pay for it?

Warren in particular got bogged down in the weeds of her Medicare-for-all pay-for plan after she was targeted at the debates, and political spectators attribute her relative decline in the polls to that health care debacle. Sanders waves the question away, flatly saying he doesn’t think he needs to come up with a specific financing plan right now, in the middle of a political campaign.

The more moderate candidates, by contrast, use the tax problem to attack the more progressive proposals as infeasible and politically toxic. Buttigieg in particular has gone after Warren for failing (until recently) to articulate a plan to finance single-payer, while touting his idea as a more viable cheaper alternative. Biden has said the same kind of thing.

In the near term, single-payer is definitely more expensive than a public option. Single-payer would cost between $21 trillion to $36 trillion over the first 10 years, depending on who you ask. The public option plans are estimated to cost more like $1.5 trillion, or possibly even less.

But over the long term, all of these plans will likely need to come up with more money. Some supporters of the public option are selling their plan as a “glide path” to single-payer, the same destination as Sanders; Buttigieg has said he hopes to one day achieve single-payer by having Americans voluntarily choose to enroll in the government insurance plan. But that would mean a program the same size as the one Sanders and Warren are proposing — the same cost challenges would await, even if the timeline is longer.

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Bernie Sanders (single-payer Medicare-for-all): Sanders has put out a laundry list of possible financing options, concentrated on taxing the wealthy and getting contributions from employers. New taxes would be introduced to replace private insurance premiums. The question is how much he needs to raise: The Sanders campaign thinks it’s about $17 trillion, while outside experts think it’s closer to $30 trillion (or more).

Elizabeth Warren (public option + Medicare-for-all): Warren has released a financing plan that covers $21 trillion for 10 years of a Medicare-for-all program; that’s the number her campaign came up with after accounting for state government contributions and administrative savings. To prevent middle-class tax increases, Warren’s plan asks employers to make maintenance-of-effort payments equivalent to what they currently pay for their workers’ health care. Taxes on the wealthy and financial transactions cover most of the rest.

Joe Biden, Pete Buttigieg, and others (public option): The public option plans are much cheaper by comparison; Biden’s campaign says his proposal should cost about $750 billion over 10 years; Buttigieg’s says his would cost $1.5 trillion. That would be partially paid for by premiums from enrollees; taxes on the wealthy or industry could cover much of the rest.

But if more Americans enroll in the public option, as Buttigieg in particular has said he hopes will happen, the price tag will increase and more financing would be necessary.