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With her new Medicare-for-all plan, Kamala Harris finally offers an unambiguous look at where she stands on eliminating private insurance. The short answer: her proposal would set up a government run system, but private insurers would still be able to compete within it.
Addressing this question — since private insurance would effectively be done away with under Bernie Sanders’s Medicare-for-all proposal — has been central to the current Democratic debate over health care, though Harris’s responses have been somewhat muddled until this point. Her health care plan, importantly, helps clear a few things up.
In laying out her proposal, Harris notes that she supports the same end goal as Sanders, but draws some distinctions in how she would go about getting there.
Unlike Sanders’s, Harris’s plan would include a substantive role for private insurers, which would still be able to offer plans under a tightly regulated system, similar to the way that private insurers currently do through Medicare Advantage. Additionally, it would transition Americans from the existing system to Medicare-for-all in ten years, instead of four. And finally, it would use a slightly different payment mechanism: Harris backs several of the methods Sanders has suggested, including higher capital gains taxes, but would only impose taxes on households making $100,000 or more. Sanders’s plan, meanwhile, would impose taxes on households making $29,000 or more.
Experts say that Harris’s approach enables her to continue supporting universal coverage — a major priority for progressives — while also making the plan a bit more politically palatable to folks who are concerned by how disruptive it could be. With a longer transition period and an ongoing role for private insurers, it means more time for people to adjust and the appearance of greater choice.
“At the end of the ten-year transition, every American will be a part of this new Medicare system,” Harris writes in a Medium post. “They will get insurance either through the new public Medicare plan or a Medicare plan offered by a private insurer within that system.”
There are three key areas where Harris’s Medicare-for-all differs from Sanders’s plan
Harris’s plan is very similar to Sanders’s and aims to include many of the same benefits: It would guarantee insurance coverage for every American and it would mean that people would pay limited out-of-pocket costs for medical care. As a Harris spokesman told CNN, out-of-pocket costs in her plan would be capped at $200 annually.
There are, however, three key areas where the two plans differ:
1) Harris’s plan includes a ten-year phase-in period between the current health care system and Medicare-for-all: As part of her plan, Harris would phase in people over the course of ten years, instead of four years, as Sanders has proposed. That extra time is intended to give insurance companies, medical care providers and Americans, writ large, a bit more leeway to adapt to this shift.
“A ten-year transition is wise and even a little ambitious,” Georgetown University health policy professor Sabrina Corlette told Vox, pointing to challenges the Affordable Care Act faced as part of its four-year transition period.
In order to navigate this transition, the Harris plan would automatically begin enrolling newborns and uninsured people, and allow anyone who’s interested to buy into Medicare immediately. It would also “provide a commonsense path for employers, employees, the underinsured, and others on federally-designated programs, such as Medicaid or the Affordable Care Act exchanges, to transition.”
The Harris campaign argues that an extended transition period would help reduce the costs of this change, though Corlette says this benefit not guaranteed, and that it would be dependent on a slew of variables.
A shorter phase-in, though much more demanding, has its own upsides, says University of Pennsylvania health law professor Allison Hoffman. “You roll it out quickly, it gets harder to roll back,” she said, noting that people become attached to the system, and it becomes much tougher to undo it.
2) Harris’s plan still includes a major role for private insurers: Harris’s plan addresses the recurring question of whether private insurance would be eliminated head-on: It enables “private insurers to offer Medicare plans as a part of this system that adhere to strict Medicare requirements on costs and benefits.” Presently, Medicare Advantage, which is used by a third of seniors, features a range of plans from different private insurers. Harris’s proposal would expand on this arrangement.
“Medicare will set the rules of the road for these plans, including price and quality, and private insurance companies will play by those rules, not the other way around,” she writes.
This tenet is significantly different from Sanders’s plan, in which private insurance would be duplicative in most instances, and only exist for a narrow set of health care needs that Medicare does not cover, such as plastic surgery.
In order to ensure that private insurers do not drive up costs for consumers, Harris emphasizes that they would be heavily regulated. “Essentially, we would allow private insurance to offer a plan in the Medicare system, but they will be subject to strict requirements to ensure it lowers costs and expands services,” she writes.
Corlette says that “guardrails” need to be in place to ensure that private insurers aren’t incentivized to solely target healthier individuals as a means of minimizing their own risk.
She also notes that there will likely be tradeoffs in the degree of administrative cost savings Harris’s plan might see versus Sanders’s. Private insurers tend to spend more money on costs like marketing, whereas a fully government-based system like Sanders’s would be expected to eliminate such costs.
3) Harris’s plan would not impose an additional tax on middle class families: Harris indicates that she agrees with many of Sanders’s proposed methods for paying for Medicare-for-all, but argues that middle-class families should not have to bear a tax burden in order to implement the policy.
Sanders has proposed a range of ways of paying for his Medicare-for-all plan, including “higher taxes on the top one percent [and] taxing capital gains at the same rate as ordinary income,” Harris writes. She notes that she backs these methods, but disagrees with the additional imposition of a tax on middle-class individuals and households.
“One of Senator Sanders’ options is to tax households making above $29,000 an additional 4 percent income-based premium,” she writes. “I believe this hits the middle class too hard. 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.”
To make up for the loss of revenue that would result from this change, Harris proposes an additional tax on Wall Street stock, bond, and derivatives transactions. “I would tax Wall Street stock trades at 0.2 percent, bond trades at 0.1 percent, and derivative transactions at 0.002 percent. Think of it like this: that’s a $2 fee on a $1,000 trade by investors and big banks,” she writes.
Harris’s plan addresses that thorny question about private insurance
When it comes to Harris and health care, one of the biggest questions that’s emerged concerns her stance on private insurance. In at least two public appearances, Harris has appeared to suggest that she supports abolishing private insurance altogether — only to reverse that position a bit later.
“Let’s eliminate all of that. Let’s move on,” she said during a CNN town hall earlier this year, appearing to refer to private insurance, only to release a statement after the fact explaining that this wasn’t exactly what she meant. During the Democratic debates in June, Harris also raised her hand when the moderator asked candidates about whether they’d be willing to abandon private insurance in favor of a government-run plan. She later explained that she had misunderstood the question, and does not support getting rid of private insurance entirely.
This issue is one that’s become central to the push for Medicare-for-all. Those who are critical of the plan, including Republicans, have argued that Medicare-for-all would force people to give up their private insurance, even if they like it. (A show of hands at a Bernie Sanders Fox News town hall earlier this year seemed to signal that more people were open to giving up their current insurance plans, than some of those critics had expected, however.)
As part of Harris’s plan, people could decide between public and private plans offered under Medicare. And employers could “get their Medicare private plan certified by the Medicare program,” after the phase-in is completed, meaning that individuals could theoretically maintain a version of their employer-sponsored insurance. It is unclear, though, how similar this insurance would be to current employer-sponsored plans.
Harris’s approach is a more “politically feasible” way to reach Medicare-for-all, says Hoffman, in part because it preserves the choice that some people are wary of losing. Keeping private insurers in the health care system to this degree also has its downsides, however.
“The negative is that you keep private insurers in the core of the program and you’re siphoning off a piece of the tax money to fund the program to give to private insurance,” Hoffman told Vox, noting that these companies can continue to be “political actors.”
The record of Medicare Advantage also offers arguments in favor and against such an arrangement. Although MA plans have helped expand the type of care seniors can access, they’ve also been called out for sketchy billing practices that rack up costs for the government.
One of Harris’s biggest policy proposals is an expanded tax credit for the middle class. Her health care plan sends a similar message.
Harris’s plan also clears up her position about Medicare-for-all and taxes on the middle class. One of Harris’s signature policy priorities, the LIFT the Middle Class Act, would give middle-class households a monthly cash payment amounting to as much as $3,000 per year for single people and $6,000 per year for married couples.
Because Sanders’s take on Medicare-for-all includes a 4 percent income-based premium on all households making more than $29,000, Harris’s support for it had spurred questions from some critics about whether her support for the health care plan contradicted her backing of the LIFT Act.
Harris makes clear in her version of the health care bill that she intends to address this apparent conflict by eliminating any tax against households making less than $100,000. That could mean that some households on the higher end of the middle-class income bracket, as determined by Pew Research, would still get taxed. It would guarantee, however, that a significant portion of people who are deemed “middle class” would not, and that the money Americans receive under the LIFT Act would not be handed back to the government to pay for their health care.
Harris says she’d make up for the lost revenue created by this structure by taxing a series of financial transactions on Wall Street that her campaign estimates would bring in $2 trillion in revenue over the course of ten years.
“Senator Harris is outlining clear, serious and thoughtful proposals to finance her approach to Medicare for All,” Michael Linden, an economic policy expert who works for the Hub Project said in a statement. “Her plans to ensure that Wall Street and multinational corporations are paying their fair share of taxes ... would generate enough revenue to offset her proposal’s higher income threshold after which premium payments begin—$100,000 rather than $29,000—which is intended to help the middle class.”
Harris’s plan will face the same legislative roadblocks as any Democratic health care proposal
Much like pretty much any Democratic health care plan that’s being proposed this cycle, Harris’s version of Medicare-for-all isn’t expected to obtain Congressional approval any time soon.
What it does do, however, is add to the mix of more than ten proposals that the Democratic party has to choose from as it continues to debate this subject. Additionally, it helps delineate Harris’s stance on health care, in a manner that could prove to be more palatable to Medicare-for-all opponents than Sanders’s version.
“The end of what Sanders would get to is a purer version of what government health care can deliver,” says Hoffman, adding, “Hers creates a pathway that is more politically possible, but is still quite hard.”
According to recent polls, certain tenets of Sanders’s version of Medicare-for-all, like the complete replacement of private health insurance, are currently less popular with Democratic voters who are worried about what such a dramatic shake-up could mean.
Harris’s approach appears dedicated to assuaging some of these concerns, while sticking to the same end goal.
“Senator Harris’s plan balances idealism and pragmatism,” says former Obama Centers for Medicare and Medicaid Services administrator Andy Slavitt. “It says in effect: We have a mandate to get everyone affordable health care and put people over profits — but we don’t need to tear down the things people have and they like in order to do it.”
