Here’s How Blue States Can Pave the Way for Medicare for All

Democrats were elected on promises of affordable healthcare. This is what states can do even under Trump.

David Dayen January 2, 2019

(Photo By Bill Clark/CQ Roll Call/Getty Images)

No sin­gle issue pow­ered Democ­rats to midterm vic­to­ries more than health­care. Repub­li­cans were round­ly con­demned for threat­en­ing a return to the pre-Oba­macare denial of cov­er­age for pre-exist­ing con­di­tions. Expan­sion of Med­ic­aid passed in three deep-red states (Ida­ho, Nebras­ka and Utah). Dozens of Democ­rats endorsed plans like Medicare for All, and won.

Democrats just got an electoral mandate to deliver cheaper, higher-quality healthcare. They have to use it, and here’s how.

With a Repub­li­can pres­i­dent and Sen­ate, the fore­cast for mean­ing­ful health­care changes at the fed­er­al lev­el before 2021 remains bleak, but 14 states now have a Demo­c­ra­t­ic tri­fec­ta”: con­trol of both cham­bers of the leg­is­la­ture and the gov­er­nor­ship. Those states can build the mod­el for a uni­ver­sal, humane health­care sys­tem, right?

Hang on. State-based sin­gle-pay­er would require a waiv­er to uti­lize fed­er­al Medicare and Med­ic­aid dol­lars and Oba­macare sub­si­dies. And Don­ald Trump isn’t the like­li­est pres­i­dent to grant such a waiver.

But that should not damp­en hopes for state-lev­el improve­ments in health­care. In fact, by cut­ting costs and increas­ing access, blue states can pave the way for a smoother roll­out of sin­gle-pay­er nation­wide after 2020, should we be so lucky.

Sin­gle-pay­er mere­ly means that the gov­ern­ment would take over the health insur­ance mar­ket. In the­o­ry that’s great, as gov­ern­ment can use the large pool of patients to bar­gain down the cost of health­care. But pri­vate com­pa­nies would still deliv­er treat­ment and med­ica­tions. And those com­pa­nies have aggres­sive­ly con­cen­trat­ed, build­ing near-monop­o­lis­tic bar­gain­ing pow­er.

As Phillip Long­man of the Open Mar­kets Insti­tute has point­ed out, in over 40 per­cent of the coun­try, a sin­gle enti­ty con­trols all local hos­pi­tals. Phar­ma­ceu­ti­cal com­pa­nies have also con­sol­i­dat­ed, and the sup­ply chain for pre­scrip­tion drugs is dom­i­nat­ed by a hand­ful of mid­dle­men. In the most recent quar­ter­ly earn­ings reports, just 10 health­care com­pa­nies earned half the industry’s prof­its, nine of them drug makers.

This has had dra­mat­ic con­se­quences for cost and access. Hos­pi­tals that dom­i­nate regions and drug com­pa­nies with a monop­oly on par­tic­u­lar med­ica­tions can sim­ply raise prices on patients with impuni­ty. And as unprof­itable providers shut down, par­tic­u­lar­ly in rur­al areas, peo­ple can­not get the treat­ment they need.

States can fight this monop­o­liza­tion of health­care; in fact, it’s essen­tial that they do. Even a gov­ern­ment sin­gle pay­er would have dif­fi­cul­ty dic­tat­ing terms to a hos­pi­tal net­work monop­oly that con­trols a large metro area. There sim­ply wouldn’t be an alter­na­tive. That’s to say noth­ing of the polit­i­cal mus­cle large health­care providers can leverage.

But Democ­rats just got an elec­toral man­date to deliv­er cheap­er, high­er-qual­i­ty health­care. They have to use it, and here’s how.

States can reject health sys­tem merg­ers and pro­mote more com­pe­ti­tion. Cal­i­for­nia, for exam­ple, recent­ly passed a law enabling the Depart­ment of Man­aged Health Care to deny merg­ers with an adverse impact on patients.

States can also low­er pre­scrip­tion drug prices. They could res­ur­rect an unsuc­cess­ful 2016 ini­tia­tive in Cal­i­for­nia, which would have reduced the price for all drugs pur­chased by the state — through Med­ic­aid or pub­lic employ­ee health plans — to the lev­el paid by the VA. They also could emu­late Vermont’s law allow­ing whole­sale impor­ta­tion of safe, cheap pre­scrip­tion drugs from Canada.

Phar­ma­cy ben­e­fit man­agers (PBMs), the unher­ald­ed third­par­ty admin­is­tra­tors that nego­ti­ate drug prices for health plans, have been crit­i­cized for skim­ming bil­lions off the top when they nego­ti­ate rebates. Increas­ing trans­paren­cy and mak­ing PBMs a fidu­cia­ry that must act in the best inter­est of their clients can dri­ve down costs; Cal­i­for­nia adopt­ed that this year.

There are even options to lever­age insur­ance mar­kets. Cov­ered Cal­i­for­nia, the state exchange, recent­ly insti­tut­ed a pro­gram that rewards or penal­izes hos­pi­tals and physi­cians based on qual­i­ty of care. That could begin to move giant providers away from preda­to­ry prac­tices that hurt patients. States that con­trol their own exchanges could cre­ate their own stan­dards. And Demo­c­ra­t­ic tri­fec­ta states like Maine and New Jer­sey, which use Health​Care​.gov, could build their own state exchanges, insu­lat­ing them from Don­ald Trump’s attempts to weak­en the law.

In Maine and Kansas, GOP gov­er­nors were the last obsta­cles to expand­ing Med­ic­aid under Oba­macare; the incom­ing Democ­rats will like­ly get that done. Gov­er­nors there, along with new Democ­rats in Michi­gan and Wis­con­sin, could also reverse the imple­men­ta­tion of Med­ic­aid work require­ments, which are designed to restrict access. And more than a dozen state leg­is­la­tures have explored a Med­ic­aid buy-in” con­cept, where res­i­dents who can­not afford pri­vate health insur­ance would be able to pur­chase a low-cost, state-run pub­lic option based on Med­ic­aid rates. (Call it Med­ic­aid for All.”)

These are just some solu­tions avail­able. None of them would cost much to imple­ment — in fact, they’d save states and patients mon­ey by con­strain­ing out­sized provider prof­its. More impor­tant, it puts the coun­try in a bet­ter posi­tion to enact sin­gle-pay­er plans that have a chance of actu­al­ly working.

It will take sub­stan­tial polit­i­cal will to take on entrenched spe­cial inter­ests like hos­pi­tals and drug com­pa­nies. But we saw Repub­li­cans win elec­tions in numer­ous states in 2010 and stop at noth­ing to imple­ment their poli­cies. Democ­rats need to be just as bold.

David Dayen is an inves­tiga­tive fel­low with In These Times’ Leonard C. Good­man Insti­tute for Inves­tiga­tive Report­ing. His book Chain of Title: How Three Ordi­nary Amer­i­cans Uncov­ered Wall Street’s Great Fore­clo­sure Fraud won the 2015 Studs and Ida Terkel Prize. He lives in Los Ange­les, where pri­or to writ­ing about pol­i­tics he had a 19-year career as a tele­vi­sion pro­duc­er and editor.
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