Behind the scenes, Democrats in Washington are trying to think about what they’ll do if the party wins the White House in 2021 on a Medicare-for-all platform but still hasn’t made much progress on the critical question of what taxes you’d raise to pay for it.
A natural fallback is to try to find ideas that put the country on the path to the single-payer vision without requiring nearly as much in the way of immediate tax hikes. To many, that means gravitating toward an idea that almost happened in the late stages of the original Affordable Care Act debate — opening up Medicare to a younger class of older people, either by reducing the Medicare eligibility age to 55 or at least creating a structure for the 55-and-older crowd to “buy in” to Medicare.
A much better idea, however, would be to do the reverse and create a universal health insurance program for children. It’s much cheaper, meaning it could be paid for with relatively modest and politically popular tax hikes on the rich and provide a clear, simple benefit to millions of families. New polling shows it’s an extremely popular idea. And most importantly, because kids would age out of the program rather than aging into it, they and their parents would create a natural constituency for further expansions so they can hold on to a benefit they currently enjoy and would fear losing.
Medicare for Kids is popular
Providing children with health care is pretty cheap. The average kid’s medical needs are overwhelmingly focused on routine, low-cost interventions. Even better, many of these interventions are basically preventive in nature (vaccines, checkups, etc.) and are highly cost-effective in the long run.
Because of this nexus, the government has long been more generous — through Medicaid and the State Children’s Health Insurance Program — about providing care to children than it is to adults. A Medicare for Kids program could accomplish a couple of key things. For one, it would cover the 4 million children who still lack health insurance. But beyond that, by simply and clearly guaranteeing coverage for all kids, it would offer peace of mind to all families that their children would have coverage no matter what happens. Last, it would offer a small subsidy to middle-class parents who are currently spending money for their kids’ insurance (both directly through premiums and indirectly through employer-size contributions), which would could help offset the enormous costs of parenting.
Data for Progress, a progressive policy and opinion research outfit, found strong backing for the idea.
Asked “would you (support or oppose/oppose or support) extending universal health care to all American children by giving all Americans under the age of eighteen coverage in a government health plan modeled off of Medicare, known as ‘Medicare for Kids?’” a solid 54 percent of the public said they supported the idea, with just 27 percent opposed. Fifty-three percent of whites like the idea, and it’s overwhelmingly popular with African Americans, who support it 66 to 17.
This is similar to what the Kaiser Family Foundation finds for Medicare-for-all, so it’s natural that progressives continue to push for their dream solution. But in the past, initially well-polling state-level single-payer health care pushes have collapsed once the extent of the needed tax hikes becomes clear. It’s possible Medicare-for-all proponents will overcome those obstacles, but if they don’t, Medicare for Kids suggests itself as a drastically cheaper fallback.
When you break down the problem into smaller parts, it’s easy to find elements that don’t require much in the way of taxes to pay for and sell with the public. But the main reason to think Medicare for Kids is a good idea is that the political economy of the approach is much stronger than for other Medicare expansion options.
Socialism for the old is a problem
The United States right now has a fairly extensive welfare state for the elderly, featuring a universal basic income called Social Security and a universal health care system called Medicare.
For decades, these programs helped persuade senior citizens to vote for the Democratic Party as the party of the welfare state even as other considerations tended to push in the other direction. In more recent years, however, Republicans stopped pushing their plan to privatize Social Security and began carefully structuring plans that would privatize Medicare so as to exempt everyone currently over the age of 55. Then, under Donald Trump’s leadership, they just completely disavowed the goal of cutting programs for the elderly and in fact started to argue that Democrats were undermining the welfare state for old people by proposing to give health care to younger people.
In an important 2015 paper, Vivenkian Ashok, Ilyana Kuziemko, and Ebonya Washington indicate that this kind of argument is effective. Their research tackles the question of why public support for economic redistribution has not risen since 1970 despite the large increase in economic inequality.
They show that the overall flat levels of support for redistribution actually mask significant shifts among different subgroups. In particular, African Americans and the elderly have become substantially less supportive of redistribution, while non-elderly whites have become moderately more supportive. Looking more precisely at African Americans, the biggest driver turns out to be a decline in support for race-specific modes of redistribution. For senior citizens, however, the biggest issue is that the elderly “have grown increasingly opposed to government provision of health insurance.”
The authors posit that “older Americans worry that redistribution will come at their expense, in particular via cuts to Medicare.”
This does not factually describe the structure of current Medicare-for-all proposals (which in fact make Medicare more generous), but it does reflect a powerful psychological dynamic. The result is that older Americans have become increasingly willing to vote in line with their culturally conservative beliefs without fear of consequence for their personal economic well-being. Indeed, they’ve often convinced themselves that voting for Republicans will help preserve America’s generous safety net for old people.
In the short term, expanding Medicare to cover people ages 55 to 65 should be a winning issue with people in that age bracket. But if it actually happens, the perverse scenario in which beneficiaries of the welfare state come to oppose its further expansion get worse. Medicare for Kids fixes this problem.
Medicare for Kids has strong political economy
The great thing from a political economy perspective is that if the beneficiaries of Medicare for Kids liked the program, they would end up having a direct personal incentive to favor its expansion.
Parents who’d loved the fact that they never had to worry about their children’s insurance would hear plans to extend the program up to age 25 or 30 as further reassuring that their kids wouldn’t end up losing out. What’s more, if the government-provided insurance turned out to be good, parents might start to want some for themselves. The basic challenges of program expansion — it costs money, people don’t like paying taxes, and special interest groups will complain — would still be there, of course, but the incentives would be aligned for success to spur program expansion.
Creating special programs for the elderly, unfortunately, has tended to have the opposite impact, and accepting a half-a-loaf strategy to extend Medicare coverage to a larger population of older people might make it harder to eventually achieve universal health care.
Medicare for Kids, by contrast, is the kind of half-measure that would actually keep the country on the path to eventually delivering a real guarantee of health insurance for everyone.