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Medicare X: the Democrats’ supercharged public option plan, explained

“I like giving people more choices, not less.”

Sens. Michael Bennet (D-CO) and Tim Kaine (D-VA) have proposed a plan to allow all Americans to purchase public insurance.

Senate Democrats are increasingly divided over how far the government ought to go to expand health coverage.

At one end of the spectrum is Sen. Bernie Sanders (I-VT), who has offered an idea to end employer-sponsored coverage and move all Americans to a government-run plan.

At the other are Sens. Michael Bennet (D-CO) and Tim Kaine (D-VA), who last week proposed a plan called Medicare X. Bennet and Kaine say their goal is similar to Sanders’s: expand coverage to all Americans. But they favor a plan that leaves intact existing sources of health insurance and adds in a new option.

The Sanders plan would equalize insurance for everyone in America — a seismic shift in how Americans are used to getting health care. The changes would be drastic to the system. The Bennet-Kaine plan would feel more familiar, leaving consumers with choices while giving everyone access to a government plan.

Medicare X would allow all Americans to buy a public health insurance plan. That plan would pay doctors the same prices that Medicare currently does, and it would allow patients to be seen at the offices and hospitals that Medicare has in network.

But it would have a different benefit package from the public program that covers Americans over age 65. The Medicare X plan would cover things that Medicare does not, such as pediatrics and maternity care.

Bennet and Kaine envision the Medicare X plan growing slowly. In 2020, it would become available only in counties with one or zero health plans selling on the Obamacare marketplace. In 2023, it would open to the entire country and, in 2024, allow small businesses to enroll too. Sen. Tim Kaine (D-VA), one of the sponsors, says he could foresee a future where large employers are also allowed to buy into the plan. (That is not included in the current version of the plan.)

Medicare X and single-payer represent distinctly different views of the future of American health care and what role the federal government ought to play. Medicare X fits neatly into the system that exists right now. It slots into the Affordable Care Act’s marketplaces and Medicare’s doctor network.

Single-payer, by contrast, is a much more radical change — one where a government health plan is not a choice but the only option available. It abolishes the Obamacare marketplaces as well as employer-sponsored coverage.

I spoke Thursday with Sens. Bennet and Kaine about their health care proposal, whether they see it as a step on the path to single-payer, and where they see their caucus going on health care in the future. What follows is a transcript of our discussion, lightly edited for clarity and length.

Sarah Kliff

There are a lot of ideas right now floating around about how to expand public insurance, ranging from Medicare X to a Medicaid buy-in to single-payer. Tell me why you decided to sponsor Medicare X. What do you like about this particular path?

Sen. Michael Bennet (D-CO)

We thought about a Medicaid buy-in and thought about a Medicare buy-in. We decided that the existing provider network with the reimbursement schedule made more sense. We included in our plan the essential health benefits of the Affordable Care Act. So it’s not exactly the same as a Medicare buy-in, but it fits neatly into the other offerings on the marketplace and gives enrollees another choice.

Sen. Tim Kaine (D-VA)

What we’re hearing from people is that they want more choices and more affordability with their preexisting conditions still protected. Where we hear this the most is in the rural parts of our states, where the population may be a bit older and sicker. When you see areas with just one insurer, those are predominantly rural America.

Medicare is a well-known and well-regarded program. In terms of putting this out as an option, they’ll get it. They’ll see the benefit as it rolls out. By not rolling it all in at once, we can keep learning how it goes. My goals is: Let’s do this in an orderly way and see how it goes.

Sarah Kliff

I read one article that described your plan as “a road to single-payer.” Do you see it that way?

Tim Kaine

I don’t really. I like giving people more choices, not less. This is my belief. My constituents are telling me they want more choices.

Michael Bennet

This is an important path to universal coverage, which we both believe in.

I don’t think the United States should be the only country to not have universal health care for all at a reasonable cost. I also think we need to recognize that there are a lot of people who get insurance through their employer and like the insurance they have through their employer.

Sarah Kliff

How do you set premiums for the Medicare X plan? It sounds like you’d be building an insurance plan from scratch that covers benefits that are different, like pediatrics and maternity care. Do you think it would be cheaper than the private plans on the marketplace?

Tim Kaine

That is a good chore for an HHS secretary to tackle. That is why we want to roll it out in 2020, to have time to do the actuarial pricing. As Michael pointed out, this isn’t a Medicare buy-in. It doesn’t touch the Medicare trust fund. The policy would have all the ACA benefits. We’d give HHS the time and seed money to figure this out and price it. But there are studies, back from 2010, that suggest a public option would not only save money but it would make the markets more competitive.

Michael Bennet

When they scored a public option, they estimated premiums would be 7 to 8 percent lower. Common sense tells you what it would look like. The politics of this are different than they were 10 years ago, too. Now these rural counties want a meaningful solution to the issues that they’re confronting with high-priced insurance and high deductibles that don’t cover them well.

Sarah Kliff

It seems like the Democratic caucus has a lot of ideas floating around right now about how to expand public insurance. You have Sen. [Brian] Schatz’s Medicaid buy-in and Sen. Sanders’s single-payer plan, among other options. Where do things go over the next five years? How do you see the caucus coming to a consensus around one of these ideas?

Michael Bennet

I think it’s great we’ve got several different alternatives. Each of us is going to be able to go home and have our constituents react to what we proposed. We’ll do what we can do to promote Medicare X. Ours feels like an elegant solution to the challenges that people are confronting. As Tim mentioned, if you really are going to go down the road of single-payer, you need to think about the fact that there are 170 million Americans who get insurance through their employers, and 20 million who are on Medicare Advantage, and they don’t want that to go away. This is trying to fill an important gap.

Tim Kaine

The bipartisan stabilization bill that is being introduced is a good step, and we’re strongly supporting it. We need to stabilize the marketplaces, and we’ve got to show the American public that we have ways to strengthen them too. If we stabilize the marketplaces, we can have a more deliberate and careful discussion about next steps, not under the possible emergency of having the marketplaces blow up.

But the idea is that Medicare X is extra, it is expanded, and you can buy it on the exchange.

I listen to Republicans, and they say they want more choices and affordability. We’ve got something for them. I’m not looking to make my case just to Democrats to vote for it. I hope we can make a successful effort with Republicans, too.

Sarah Kliff

I wanted to ask you about the name. As you mentioned, this isn’t actually a Medicare buy-in. So why use the word Medicare in the name? Also, where did the X come from?

Tim Kaine

Medicare is for X for extended, extra, buy it on the exchange. If you were here, you’d see Michael making an X with his fingers. He’s so frequently compared to the X-Men.

[There is laughter here, as well as a remark about Dos Equis beer.]

But the idea is that Medicare X is extra, it is expanded, and you can buy it on the exchange. Our “X” term is also one you see in the medical space. Our bill includes negotiated prices on prescription drugs too.

Michael Bennet

We use the Medicare networks and Medicare reimbursement levels, so nothing new is set up. The network is there, Medicare is known, and while this is not implicating the Medicare Trust Fund, it will still be using the Medicare structures.

My office gets a lot of complaints from people fighting with their insurance. Seldom do we get a complaint about problems with Medicare.