On the eve of a Democratic National Convention taking place as millions lose health care coverage, the health care industry is launching a new ad campaign pressing Democrats to back off from the party’s already compromised health care promises. That pressure seems to be having its intended effect on Capitol Hill, as congressional aides say the party will not push the initiative if Joe Biden wins the presidency. The signs of retreat come as health care industry profits are skyrocketing and the industry’s campaign cash has flooded into Democratic coffers.
The Partnership for America’s Health Care Future (PAHCF) — a front group created by health insurance, pharmaceutical, and hospital lobbying groups to oppose “Medicare for All” — announced on Friday that it is launching a new national ad campaign to persuade Democrats to abandon their plans to create a public health insurance plan. The group said it will run ads during the Democratic National Convention (DNC) this week. PAHCF is led by a former Hillary Clinton aide and run out of the offices of a DC lobbying firm led by former top Democratic congressional aides.
A substantial “public option” plan — which polls show is wildly popular — was the centerpiece of recent policy negotiations between supporters of former vice president Joe Biden and progressive Vermont senator Bernie Sanders, who had been pushing for a more expansive Medicare for All program. A draft of the party platform, approved by DNC members late last month, includes a pledge to pass a public option, or a government-run health insurance plan that would compete with private insurers.
Within twenty-four hours of the launch of the industry’s new ads, however, anonymous Democratic congressional sources were telling the Hill that Democrats likely won’t bother with the public option fight next year if Biden wins the election. Instead, they said, the party will work to tweak its 2010 health care law, the Affordable Care Act (ACA), which has done little to limit insurance or hospital costs and has failed to ensure universal coverage.
To justify the preemptive retreat, Democratic congressional aides told the newspaper that the party’s moderate crop of 2020 Senate challenger candidates could make it harder to pass a public option. That assertion comes even though every single one of those candidates is currently campaigning in support of a public option, according to a TMI review of campaign statements.
The situation echoes the Democratic promises and subsequent surrender on a public option that marked the debate over health care more than a decade ago — only this time around, the health care crisis is an even more acute emergency. While most developed countries have managed to contain COVID-19, the pandemic is spiraling out of control in the United States, and an estimated 27 million people have lost their employer-based health insurance plans, according to the Kaiser Family Foundation.
At the same time, the coronavirus crisis has been a boon for much of the corporate health care industry — particularly for insurance companies and drugmakers, but also for some investor-owned hospital companies. As PAHCF gears up to fight the public option, the interests that the group represents have been generating outsize profits and benefiting from massive federal assistance.
Democrats Promise Big Reforms
The idea of a public option isn’t new — progressives fought unsuccessfully for its inclusion in the ACA, but the Democratic-controlled Senate refused to pass it. Ten years later, the public option has become a middle-ground proposal favored by many moderate Democrats.
One of the more common arguments for supporting a public option over Medicare for All is that it would be easier to pass through Congress than a single-payer program that eliminates the need for private health insurance coverage.
The public option generally polls better than Medicare for All — people like being told they can buy into a plan or choose to keep their existing plan — though public polling has also found strong support for both ideas, especially as Americans grapple with the coronavirus crisis.
Of course, whether you keep your employer-based health insurance plan is less up to you than your boss or the overall state of the economy, as millions of Americans have experienced during a pandemic that’s caused global business shutdowns. Medicare for All would also likely cost the country far less in the long term.
During the 2020 Democratic primary, Biden repeatedly slammed Sanders’s Medicare for All proposal, while offering scant details about what a government health insurance plan would look like in his administration. Last month, the joint policy task force between the Biden and Sanders camps released a detailed framework for a public option plan that would actually represent a significant piece of reform, if enacted.
“The public option will provide at least one plan choice without deductibles, will be administered by the traditional Medicare program, not private companies, and will cover all primary care without any copayments and control costs for other treatments by negotiating prices with doctors and hospitals, just like Medicare does on behalf of older people,” the task force wrote.
The Biden-Sanders task force plan includes some key details about what a public option would look like that weren’t clear during the Democratic primary campaign. Biden’s website never said (and it still doesn’t say) whether his public option plan would have a deductible. It also wasn’t clear who would administer the plan — the task force document says Medicare. Anyone could sign up.
A draft of the DNC platform includes similar language about a public option. It says that Democrats will “make available on the marketplace a public option administered through the Centers for Medicare and Medicaid Services (CMS) which includes a platinum-level choice, with low fees and no deductibles.” The DNC language would also make the public option available to all Americans, and “will cover all primary care without any co-payments and control costs for other treatments by negotiating prices with doctors and hospitals.”
“A More Modest Package of Fixes”
Despite optimism from progressives about Biden’s health care plan, the negotiations between the Biden and Sanders teams might not ultimately matter.
According to a new report in the Hill, Democratic congressional aides anticipate “the party would start next year with a more modest package of fixes to Obamacare that did not include a public option in an effort to get some early points on the board.”
The story reads like a trial balloon offering prefabricated talking points for the early weeks of a Biden administration when Democrats make huge concessions to industry in exchange for peanuts, while progressives watch in horror.
The Hill further reported: “A Senate Democratic aide . . . noted that if Democrats win back the Senate, it will be through red or purple states, and there will be plenty more moderate members in the caucus.”
Every single Democratic challenger running in a competitive Senate race this cycle has publicly campaigned on a public option — Mark Kelly in Arizona, Sara Gideon in Maine, Jaime Harrison in South Carolina, John Hickenlooper in Colorado, Theresa Greenfield in Iowa, Cal Cunningham in North Carolina, Steve Bullock in Montana, Jon Ossoff in Georgia, and Barbara Bollier in Kansas. Even Amy McGrath, the Trump Democrat running in Kentucky, supports a public option.
There are some better potential explanations for why Democrats might give up on the public option already.
For one, Democratic lawmakers have received $86 million from donors in the health care industry since 2019, according to OpenSecrets. That’s an average of $310,000 per politician. The party’s Senate-focused super PAC and an affiliated dark money group have also received large donations from health care interests.
Perhaps the biggest factor at play is that the corporate health care industry can and likely will spend tens of millions of dollars to try to make the public option unpopular and demonize the Democratic Party by extension.
After all, in 2009 and 2010, the health insurance lobbying group America’s Health Insurance Plans (AHIP) secretly funneled $100 million into the US Chamber of Commerce to finance a marketing and astroturfed campaign against the Affordable Care Act. Democrats ultimately nixed the public option before passing the bill, and they ended up losing control of the House of Representatives in a landslide election anyway.
Thriving Health Care Industry Ready to Pounce
PAHCF — a dark money group led by AHIP and lobbying groups for pharmaceutical companies and hospitals — already spent $4.5 million on slamming Medicare for All in presidential primary states and at least as much to block a state-level public option in Colorado this year.
And that was before COVID, which has been an absolute windfall for much of the corporate health care industry.
Health insurance companies doubled their profits between April and June compared to last year, specifically because Americans are avoiding medical care and putting off surgeries.
The Trump administration has been throwing piles of cash at pharmaceutical and biotech companies — at least $8 billion so far — to produce stockpiles of potential COVID vaccines “before clinical trials have been completed,” according to the New York Times.
Hospitals have been hit hard by the pandemic, as emergency rooms have seen surges of patients with deadly respiratory issues. Doctors and workers have risked their lives to save others, often without adequate protective gear. Hundreds of health care workers have died. Many hospitals are struggling financially because people are avoiding medical care.
Some hospitals are doing better than others. In June, Reuters reported that two major investor-owned hospital chains, HCA Healthcare and Tenet Healthcare, had received billions of dollars in federal loans and grants since the start of the pandemic and “appear to be benefiting disproportionately from the initial government relief as some other hospitals struggle to stay afloat.” HCA and Tenet are both PAHCF members.
On Friday, PAHCF previewed its new advertising campaign against the public option.
One ad warns that “your taxes would pay for a public option.” This should evidently scare people who are already paying expensive monthly premiums to insurance companies that often find ways to avoid paying for their care.
Another ad says the public option could become “the third largest government program” behind Social Security and Medicare.
Echoes of the Public Option Retreat a Decade Ago
If the promises and subsequent retreat seem familiar, that’s because the situation echoes what happened a decade ago.
Obama and Biden came into office with sky-high approval ratings and a filibuster-proof Democratic Senate majority — a perfect setting for the new Democratic administration to quickly pass a public option. However, soon after being elected, Obama and Biden’s White House began backing away from the public-option pledge — well before the party lost its sixty Senate votes.
“One of the earliest signs that the public option was a negotiable item for the administration came in July 2009, from Rahm Emanuel, the White House chief of staff,” reported Health Affairs. “Emanuel floated the idea of a ‘trigger’ that would enable the public option only if the desired competition and cost control failed to materialize. During the congressional recess in August 2009, at the height of the town hall pushback against health reform, other administration voices began to downplay the importance of the public option.”
By the end of 2009, Senate Democrats dropped their support for a public option in response to opposition from Senator Joe Lieberman. A few months later, as the ACA was being finalized, Democratic senators refused to even use their power to force a recorded public vote on legislation to create a public option.
Fast forward ten years, and some Democratic congressional aides appear to be telegraphing the retreat process again — setting the stage for backing off a public option before the election has even occurred.