Don't Bust Up Medicare and Turn It Over to the States!

Democratic Congressman Ro Khanna of California has introduced legislation, and Senator Edward Markey (D-Mass.) may be preparing to do the same, that would turn over Medicare and other federal health care monies to the states for experimentation in state-based health care plans. There is no requirement in the bill that a state’s plan be a single-payer bill. A state can get the Medicare money based on the politics and the discretion of the secretary of Health and Human Services (HHS). Despite the good intentions of many of its promoters, such legislation is a bad idea.

Medicare has a proud history as the foundation of the desegregation of the nation’s hospitals because of its provision that hospitals had to be certified in compliance with civil rights law in order to receive Medicare funds. A vibrant, 1960s, on-the-ground, civil rights movement—in conjunction with federal Medicare law—transformed the country’s health care system towards justice. That would not have happened had Medicare been implemented by states. Turning over health care policy to the states is a backward move, an abandonment of the campaign for "Improved Medicare for All."

The history of state-based program implementation is not a pretty one. Voting rights and reproductive freedom now suffer at the hands of state laws. It was the now-embattled federal voting rights act that brought advancement.

Progress in one state is no guarantee of progress in the others. Despite the passage of decades, many states have yet to achieve collective bargaining rights for public workers. Ten states have not expanded Medicaid in the 14 years since the passage of the Affordable Care Act, and eligibility requirements for Medicaid vary from difficult to draconian.

In ten states, adults without children are not eligible for Medicaid, and in Texas a single mother with one child is not eligible for Medicaid if her income is above $272 per month. In some states, many with large African American and Hispanic populations, the Medicaid benefits range from inadequate to miserly. There is a reason why “states’ rights” has only negative connotations.

States have much taxing and benefit-setting power over Workers’ Compensation and Unemployment Insurance to the detriment of those vital programs. As states compete for businesses to bring them jobs, workers suffer from reductions in the level of benefits and the number of weeks of eligibility. Corporations make tax breaks and other demands from states as a condition of location. Politicians pick up the cry as they want the credit for bringing jobs. These variations in state plans have led to a race to the bottom as state after state succumbs to the campaigns that assert that a state is losing its ability to attract jobs because of high taxes and benefits in these two programs.

What would make state-based health care different? Do we really want to take health policy away from the federal government and give it to the states?

The Khanna legislation has only minimal requirements for any state to get a waiver to receive all the federal health care funds--Medicare, Federal Employee Health Benefits, Tricare, Medicaid, Affordable Care Act subsidies. The state must simply assert that its health care plan will give benefits as good as those that the beneficiaries of Medicare and the other programs had before. Then the secretary of Health and Human Services (HHS) can approve the state’s plan and hand over the funds. Actually, the language of the bill is stronger—it says “shall grant a waiver….” Nothing in the bill prevents the turning over of Medicare money to states that want to experiment with market-based, or public option, or profit-based managed care systems, or whatever else a state comes up with.

Do we really want to take health policy away from the federal government and give it to the states?

That’s a low bar—simply asserting that the benefits for Medicare beneficiaries will be as good as before. Even that provision is unenforceable as exemplified by the total lack of HHS insistence that Medicare Advantage (MA) plans comply with the law that requires that those plans must cover everything that traditional Medicare covers. The private Medicare Advantage plans unjustly delay and deny care as they limit patients’ rights to see specialists, deny patients access to the best rehab centers, kick them out too early, and prohibit access to centers of excellence such as the Mayo Clinic, MD Anderson, and Sloan Kettering.

The law says the MA plans must cover the same benefits—but they don’t. Those MA plans simply assert that they cover them, and HHS and its Centers for Medicare and Medicaid Services (CMS) do not currently enforce this law on Medicare Advantage plans. HHS and CMS won’t have the capacity to enforce equal benefit provisions on the states either. That’s a gargantuan administrative task to oversee millions of transactions. CMS audits only a tiny percentage of MA plans.

The Khanna legislation also has a requirement that a state must reduce the rate of the uninsured to less than 5% within 5 years. That’s an even lower bar. Already 10 states have less than 5% uninsured! They wouldn’t have to do anything to claim this windfall in federal monies.

Some advocates of state-based single payer health care are promoting the Khanna legislation. Despairing of the national effort to win Improved Medicare for All, they project that there must be intermediate steps in which states enact single payer health care and somewhere down the road other states will follow suit and then the nation will win single payer health care. They posit the Canadian example where, beginning with Saskatchewan, one province at a time enacted single payer and eventually it was implemented nationwide.

But Canadian law was very different from current law in the U. S. Canada had no federal health care legislation at the time of the Saskatchewan enactment of single payer. The U. S. has federal health care plans that would have to be busted up to get the money to the states—a high price to pay for the very iffy possibility that a state could overcome the necessary taxing and balanced budget constraints that place all good state social programs in competition with each other.

Medicare has been our best program—publicly funded and available to all. It has been damaged by privatization, pushed by CMS, that has been handing it over to Medicare Advantage, private equity, venture capital, and Accountable Care Organizations. An energetic movement is currently building to battle that privatization. The last thing we need is to end Medicare as a federal program.

There is no program—short of national, not-for-profit, single payer or a national health service—that can fix the current health care crisis.

How would a state cover a traveling Medicare beneficiary who spends the winter in warmer climes? How would a state cover a worker who works across state lines yet lives in the state or vice versa? How would the state cover workers who are currently part of nationwide employer health benefit plans? There are many questions and no good answers.

The dubious assumption is that once one or a few states pass single payer, others will see it is good and the whole country will go single payer. Really? That didn’t happen with public employee collective bargaining or with Medicaid expansion. That’s not happening with reproductive rights or voting rights.

Once states get control of all that health care money—how would we ever get it back to the national level? There will be jobs and political interests that want to keep that money. Federal responsibility for health care will be gone—hurting us all and our ability to advance to a national Improved Medicare for All system.

States face much higher barriers to reach single payer than does the federal government. States have to balance their budgets, but the federal government doesn’t. In the states, health care will have to compete with education and roads and childcare and lots of worthy social causes. States will have many legal challenges, but Medicare has passed Supreme Court approval. An Improved Medicare for All plan could be swiftly implemented following enactment just as Medicare was up and running, in a pre-computer age, within ten months.

There is no program—short of national, not-for-profit, single payer or a national health service—that can fix the current health care crisis. During the pandemic the nation lost over a million people--300,000 of those lives due to its lack of universal health care. It’s time to take a deep breath and face the reality that nothing less than throwing the for-profit industries out of health care will allow us to create the humane, compassionate health care system that everyone in the United States deserves.

Those politicians who assert that it is not currently possible to pass Improved Medicare for All and suggest that we, instead, do something else, should be asked: What will you do to make it possible, because nothing less will work? Projecting intermediary steps, especially ones that can’t work, only delays national single payer.

.